Which of the following gives rise to a pecuniary externality? ...

[ETearle]

Which of the following gives rise to a pecuniary externality?
 
  A) Excessive consumption of alcohol leading to ill health
  B) Sudden increase in the demand for diamonds leading to an increase in their price
  C) Deforestation leading to the extinction of many species
  D) Globalization leading to the displacement of indigenous workers

Question 2

If Bonnie can produce either 10 hats or 20 scarves in a month, and Phil can produce either 5 hats or 10 scarves in a month then
 
  A) Bonnie is more efficient at producing hats, compared to Phil.
  B) Bonnie is more efficient at producing scarves, compared to Phil.
  C) both A and B above are true.
  D) none of the above is true.

[nhea]

Answer to Question 1

B

Answer to Question 2

D