Economics

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Externalities A) cannot be expressed in dollar amounts. B) always make society better off. C) are always part of private costs or private benefits. D) always create extra social costs. E) can be either benefits or costs. Answer: E

If I chose to get a job after high school I would have more money than if I went to

Watson enjoys playing golf at the country club. An 18-hole round generally takes him out of his office for about 4 hours of relaxation and exercise. He works hard during most of the week but likes to play on Wednesday afternoon to avoid the 3 patient visits per hour (at $30 per visit) he otherwise would have received. Since he is already a member of the club, he makes only a small out-of-pocket expenditure of $10 to the club each time he plays. [NB. all parts of this question combined count the same as one of the other questions.]

3 Answer A A tax can be used to ensure that those who generate harmful effects pay for them rather than third parties. 4 Answer B Public goods cannot be left to market forces as they are non-rival and non-excludable. A and C refer to merit goods and D to demerit goods. 5 Answer B More training, if in appropriate areas, should enable workers to move more easily from declining to expanding industries. A would help to reduce geographical immobility. C and D would be likely to increase demand and employment. 6 Answer B The socially optimum output is where MSB equals MSC, at point W. To achieve this output costs need to rise to incorporate external cost. The marginal external cost at W is represented by the gap between MSC and MPC.

There are many benefits and disadvantages of the traditional structure within a corporation. The greatest benefits you get with the traditional structure of a corporation are specialization and efficiency. Within the structure there is a high level of specialization and each field of expertise or specialty is like a company within a company. Each one is pretty much charged to carry out a specific role or duty. Often times you start out at an entry-level position within the

There are many reasons why a trader may decide to set up company. Considerations include the credibility and prestige of the company, which is public companies associated with the available resources to obtain financing, and the possibility of limiting liability. It is important to note that not all companies offer their shareholders of limited liability in respect of claims by creditors.

Federal Reserve has two other tools that it can use to change the money supply.

d. A fall in income causes the demand for an inferior good (hamburgers) to increase.

An externality is an effect of an action on another party that is not accounted for in the costs or benefits of that action accruing to the parties involved in the action. These externalities can be either positive or negative. In this article, we have a negative externality from the use of a public good. The article shows the conflict between the city of Barrington’s sewage line creating a foul smell in a nearby town called “East Providence.” The benefit is the use of waste removal from Barrington, but it is costing East Providence the access to fresh air. Overall, we see that one towns benefit of a sewage line is impacting another town’s air in a negative way, which is the concept of a negative

Historically, commercial companies developed as a means of allowing a number of people to pool their resources (in the form of capital or management skills) to undertake an enterprise too large for a single individual. Creating a separate legal person to hold and incur the rights and obligations of the enterprise simplified dealings between the enterprise and those with whom it conducted business.

Depend of the size of my business, I would definitely think to incorporate my business. Some of the advantages would be growing my corporations can be attractive for some investors. That will give more resources, capital to expand my business. Incorporating my business can help me to earn more clients and partners. Another advantage is secure my assets from my personal belongings. As a corporation’s owner, I will have limited liability protection which allow me to acquire personal assets without a risk. And lastly, as a corporations, I would have the door

misspent. The impact of a large disaster on international trade can be transmitted either directly

Like you can see there can be either costs, or benefits that affect those third parties. When it is a cost that is imposed on third parties, it is called a negative externality; negative externalities occur when a decision or activity imposes costs on anyone that is not involved in the making of the decision, that is if a decision imposes any kind of external cost, which are

For instance, Kingfisher airlines, Royal Challengers Bangalore and White Mischief Holidays are all full-fledged and established businesses. Again, from the company’s perspective it does not break the legal spectrum and therefore helps it to avoid unnecessary court cases and trials.

(ii) Government production at lower priceswe have a direct governmental influence on allocation because the government itself undertakes the responsibility of the production of the positive external good. supplies it at a lower price, in some cases free of charge