A pecuniary externality _____
a. affects the prices facing the third parties on which the externality falls
b. affects the products bought by third parties
c. affects the production functions of third parties
d. affects the production functions of producers of the externalities
a
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The aggregate supply curve cannot tell us
A) how the total dollar values of spending will ultimately be divided between output and prices. B) how changes in the price level affect quantity demanded of all commodities. C) what the effect of changes in interest rates will be on real GDP. D) anything about the quantity demanded of all commodities and the price level.
The fact that at the competitive equilibrium nobody can be made better off without making someone else worse off implies that
A) the equilibrium is pareto efficient. B) the equilibrium is not pareto efficient. C) the prices need to adjust further. D) further gains from trade are possible.