Which of the following statements are true regarding externalities? (check all that apply.)
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Business, 05.12.2019 19:31 cravens511peeelg
Which of the following statements are true regarding externalities? (check all that apply.)
a. deadweight loss can be either a foregone benefit or the total cost of the externality to society.
b. a negative externality occurs when an economic activity has a spillover cost to a bystander.
c. in the case of an externality, the free market will maximize social surplus.
d. for computing efficient outcomes, economic agents adjust the demand curve to account for negative externalities.
Answers: 2
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China's new 5 percent tax on disposable wooden chopsticks, reflecting concerns about deforestation, has been praised by environmentalists. the move is hitting hard at the japanese, who consume 25 billion set of wooden chopsticks annually. almost all of the chopsticks used in japan come from china. the reuirements for chinese manufacturers of wooden chopsticks to pay the 5 percent tax is a factor in their external environment.
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