Many external costs occur because
a. people do not pay the true cost of using a resource.
b. people do not pay the private cost of using a resource.
c. companies do not pay the market price for natural resources.
d. companies pay more than the true cost of using a resource.
A
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Many auction sites, such as eBay, provide a reputation score by which previous customers can rate a seller. Which of the following characteristics of a competitive market is this policy trying to emulate?
A) There is freedom of entry and exit. B) There are very low transaction costs. C) There are only one or two sellers. D) Buyers have more complete information.
Unanticipated inflation occurs when
A) everyone knows perfectly the true rate of inflation. B) the actual inflation rate differs from the anticipated inflation rate. C) the inflation rate is zero. D) there is no change in the purchasing power of money.