A teenager plays his radio loudly at the beach. What can we conclude?
A) He creates a negative externality if it unintentionally annoys or upsets others.
B) He creates a positive externality if it unintentionally benefits others who enjoy the same music.
C) He creates no externality, if others remain unaffected by the music.
D) All of the above.
Question 2
Which of the following statements is true of marginal analysis?
A) Marginal analysis is a tool used in optimization in levels.
B) Marginal analysis compares the consequences of doing one more step of something.
C) Marginal analysis of alternatives will mostly give an outcome different from optimization in levels.
D) Marginal analysis involves the calculation of total net benefits of all the available alternatives.
