Question 1
My roommate ________. This is an example of an external benefit.
◦ sings (badly) in my presence
◦ plays the drums whenever I am home
◦ smokes cigars in the kitchen whenever I make dinner
◦ cleans up after his dog and keeps it from eating my ferrets
Question 2
When the government pays for childhood vaccinations, it is
◦ internalizing an external cost.
◦ using taxes to discourage an external cost.
◦ subsidizing an external benefit.
◦ using direct regulation to discourage an external cost.