Marginal social benefits are equal to
A. marginal private benefits + marginal internal benefits.
B. marginal private benefits - marginal internal benefits.
C. marginal private benefits + marginal external benefits.
D. marginal private benefits - marginal external benefits.
Answer: C
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In terms of a nation's production possibilities frontier, what impact does international trade have?
A) International trade shifts the nation's production possibilities frontier outward. B) International trade shifts the nation's production possibilities frontier inward. C) International trade allows the nation to consume at a point outside its production possibilities frontier. D) International trade shifts the production possibilities frontier outward for the goods that are exported and inward for the goods that are imported. E) International trade shifts the production possibilities frontier outward for the goods that are imported and inward for the goods that are exported.
Moral hazard occurs when an agreement encourages undesirable behavior
Indicate whether the statement is true or false