Which of the following is not an example of an externality?
A. Your employer requires all staff to wash their hands before serving lunch to guests.
B. You bring in trash cans from the curb rather than leaving them for your neighbors to see all week.
C. Your college roommate plays Call of Duty in the living room keeping you up the night of an exam.
D. You live alone and left a mess of dishes from lunch.
Answer: D
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For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced, what must be done?
A) The size of marginal external benefit must be accurately determined. B) The government must produce the product. C) Private production and private consumption must both be directly subsidized. D) The quantity demanded must be decreased to the efficient amount. E) Private production without the subsidy must be prohibited.
Which of the following is most likely to result from a stronger dollar?
A) U.S. goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them. B) U.S. goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. C) U.S. goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them. D) Americans will purchase fewer foreign goods.