An example of an external cost

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Reference no: EM13743142

Which of the following is an example of an external cost?

A. secondhand smoke
B. increased gas prices for drivers of SUVs
C. the cost you pay your plumber to install a new hot water heater
D. your high electric bill that results from leaving your lights on all night
2. Price controls instituted by President Nixon in 1971

A. generated shortages in the markets for construction, wool, oil, steel bars, toilets, jeans, and others.
B. generated shortages, confined mostly to just the markets for gasoline and oil.
C. were successfully able to control inflation by 1973.
D. were set above the equilibrium prices and made little impact as a result.
3.If a tin of sardines creates a noxious odor for non-sardine-eaters equivalent to $1 per tin, the government could correct the odorous externality and achieve an efficient outcome by

A. taxing sardine tins at a rate of $1 per tin.
B. subsidizing sardines tins at a rate of $1 per tin.
C. capping total sardine consumption at 1000 tins per day.
D. banning sardines.
4 In 1974, there were ________ airline firms operating in the United States.

A. 10
B. 79
C. 38
D. 16
5When speculators are right, they make society better off. TRUE OR FALSE 

Reference no: EM13743142

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