Which of the following is an example of a negative externality (additional social cost)?
A. an increase in the value of land you own when a nearby development is completed
B. the costs paid by a company to build an automated factory
C. the higher price you pay when you buy a heavily advertised product
D. falling property values in a neighborhood where a disreputable nightclub is operating
Answer: D
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A country cannot produce a mix of products with a higher value than where
A) the isovalue line is tangent to the production possibility frontier. B) the isovalue line intersects the production possibility frontier. C) the isovalue line is above the production possibility frontier. D) the isovalue line is below the production possibility frontier. E) the isovalue line is tangent with the indifference curve.
Money is always neutral. This statement is most likely to be made by a proponent of the
a. new Keynesian model. b. monetarist model. c. real business cycle model. d. classical model. e. both c and d.