Which one of the following is not an example of an externality
a. Carbon dioxide emissions from a motor vehicles
d. Increased costs of mining iron ore drive up the price of steel
b. Acid rain damages wildlife habitat in a region downwind from a factory
e. Over-fishing results in the depletion of the food supply of an endangered marine mammal
c. A driver enjoys beautiful scenery while driving through a National Forest
Ans: d. Increased costs of mining iron ore drive up the price of steel
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Wichita is building a convention center and financing it with revenues raised from a city hotel tax. Local politicians assert that the convention center is essentially free for Wichita residents because out-of-town visitors are paying for it
Someone who is practicing the economic way of thinking would disagree because A) they believe that Wichita does not need a new convention center. B) there are other projects that could be undertaken with the tax funds. C) the convention center may not pass a marginal cost-benefit test. D) the hotel tax may lead to a decline in visits to Wichita. E) the hotel tax may reduce commercial property values in the area.
The marginal revenue product sets an upper limit to the wage rate an employer will pay.
Answer the following statement true (T) or false (F)