The ability to produce a good at a lower opportunity cost than another producer is called

Which of the following is an advantage of automatic stabilizers?

A) The lag for automatic stabilizers is relatively long. B) It is much easier to measure the impact of automatic stabilizers compared to the impact of discretionary fiscal policy. C) There is no administrative cost to implementing automatic stabilizers. D) Because they affect disposable personal income directly, automatic stabilizers act swiftly to reduce the degree of changes in real GDP.

Which of the following describes how a negative externality affects a competitive market?

A) The externality causes a difference between the private cost of production and the private benefit from consumption. B) The externality causes consumer surplus to exceed producer surplus. C) The externality causes a difference between the private cost of production and the equilibrium price. D) The externality causes a difference between the private cost of production and the social cost.