If grocery stores in high-crime areas charge higher prices than stores elsewhere, it is because
A) each item sold must bear its share of the higher insurance costs.
B) residents of high crime areas tend to be less price-conscious shoppers.
C) the costs of crime are a legitimate cost of doing business.
D) the store owners are not setting marginal cost equal to marginal revenue.
E) there is less competition between stores in high-crime areas.
Question 2
A negative externality clearly occurs when
A) a person's action unintentionally benefits other people.
B) a person behaves in the public interest.
C) a person's action unintentionally imposes costs on other people.
D) a person couldn't care less about anybody else.
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