Explain the difference between a positive production externality and a positive consumption externality
What will be an ideal response?
A positive production externality occurs when a firm produces a good and that production provides benefits to parties other than the firm. A positive consumption externality occurs when a person consumes a good and that consumption provides benefits to others who did not consume the good.
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Some economists believe that a positive aggregate demand shock to an economy with large amounts of excess capacity and unemployment does not necessarily cause an increase in prices. Economists who adhere to this belief are followers of
A) Keynesian economics. B) Say's laws of economics. C) classical economics. D) supply-side economics.
Suppose a plaintiff hires a lawyer to represent her in a court case. To which of the following contracts would a highly risk-averse plaintiff agree?
A) The lawyer is paid by the hour. B) The lawyer receives a share of the settlement. C) The lawyer receives a fixed fee. D) The lawyer pays the client a fee for the right to the entire settlement.