Pollution is a by-product of some production processes, so on this count real GDP as measured
A) is adjusted downward to take into account the pollution.
B) is adjusted upward to take into account the expenditures that will be made in the future to clean up the pollution.
C) tends to overstate economic welfare.
D) tends to understate economic welfare.
C
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What must a government know for the infant industry argument to be a valid reason for imposing tariffs?
What will be an ideal response?
The Coase theorem states that
A. positive externalities are directly related to the weather-the better the weather, the more positive externalities. B. in the case of trivial or zero transaction costs, negative externalities are more likely to appear. C. when transaction costs are high, positive externalities will be minimized. D. in the case of trivial or zero transaction costs, the property rights assignment does not matter to the resource-allocative outcome.