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

[AEWBW]

Which of the following gives rise to a positive externality?
 
  A) Sudden increase in the price of oil due to a supply shock
  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) Consumption of a drug to cure a communicable disease

Question 2

Explain the principal-agent relationshi
 
  What will be an ideal response?

[emsimon14]

Answer to Question 1

D

Answer to Question 2

In a principal-agent relationship, the principal designs a contract specifying the payments to the agent as a function of his or her performance, and the agent takes an action that influences performance and thus the payoff of the principal.

[AEWBW]

YES! Correct, THANKS for helping me on my review

[xiaomengxian]

Thanks for the timely response, appreciate it