Author Question: Suppose a wallet firm has been dumping its wastes into the local river. The government finds out and ... (Read 58 times)

MGLQZ

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Suppose a wallet firm has been dumping its wastes into the local river. The government finds out and insists that the firm pay for the cost of the river cleanup. As a result, we can expect:
 a. more wallets to be produced at a lower price.
  b. more wallets to be produced at a higher price.
  c. fewer wallets to be produced at a lower price.
  d. fewer wallets to be produced at a higher price.
  e. the same number of wallets to be produced at a higher price.

Question 2

John paints the exterior of his house and, as a result, his neighbor Christine is able to sell her home for 5,000 more than she could have before. John's house painting:
 a. creates a negative externality for Christine.
  b. shows John is a free rider.
  c. results in an efficient market outcome for both.
  d. creates a positive externality for Christine.
  e. was poorly done.



gabrielle_lawrence

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Answer to Question 1

d

Answer to Question 2

d



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