An economic activity in which benefits or costs affect third ...

[LaDunn]

An economic activity in which benefits or costs affect third parties is called
 
  A) a public good.
  B) a third-party good.
  C) the exclusion principle.
  D) an externality.

Question 2

The rationing function of prices refers to
 
  A) the situation when government must intervene in a market when there is a large shortage or surplus.
  B) the synchronization of decisions by buyers and sellers that leads to an equilibrium.
  C) the synchronization of decisions by buyers and sellers through the direction of government agencies.
  D) the situation when only the rich get the goods they want.

[tanna.moeller]

Answer to Question 1

D

Answer to Question 2

B