Answer:
negative consumption externality.
Explanation:
A negative externality arises when the production or consumption of a finished product or service has negative impact (cost) on a third party.
On the other hand, a positive externality arises when the production or consumption of a finished product or service has a significant impact or benefits to a third party that isn't directly involved in the transaction.
In this scenario, your neighbor enjoys seeing the grass in his yard grow wild and free, a practice with which you disagree because it poses a danger on the people around as snakes and other poisonous animals may breed or live there.
Hence, this is an example of a negative consumption externality because it's the potential of causing you harm or endangering your life.
Answer:
D) Permit limited private ventures
Explanation:
An absolute command economy will not permit limited private ventures since it is practicing a socialist or communist political and economic system. In a socialist system all means of production is controlled by the state and liberty to private enterprise is restricted.
Answer:
C. consumers make their purchase decisions based on perceived value.
Explanation:
Consumer perceived value is the benefit of a product that the consumer receives by buying any specific goods or services. Perceived value is the satisfaction level of consumer that customer look in the product, rather than just paying for the product, therefore, the company need to work and develop their brand and value in the market. Cost does not define the value of the product, rather it is a satisfactory level of consumer that defines the value and price of product. Example; Customer does not pay for the software, however, they pay for the solution.
Answer: $200,000 and its economic profits were zero.
Explanation:
First and foremost, we should note that when calculating accounting profit, the implicit cost isn't taken into consideration.
Therefore, the accounting profit will be:
= Revenue - Explicit Cost
= (4000 × 300) - Explicit cost
= 1,200,000 - 1,000,000
= 200,000
Then, Economic Profit will be:
= Accounting profit - Implicit cost
= 200,000 - 200,000
=0
Therefore, its its accounting profits were $200,000 and its economic profits were zero.
Answer:
If the pure expectations theory is correct, a downward-sloping yield curve indicates that interest rates are expected to decline in the future.
Explanation:
The three theories based on term structure of interest rates includes:
1. Pure Expectation Theory
2. Liquidity Premium Theory
3.Segmented Markets Theory
In Pure Expectations Theory, the term structure shown in the shape of the yield curve is gotten solely by the expectations of interest rates.
According to pure expectations theory, the yield curve has an Upward sloping, if there is an expected increase in rates and expected decrease in rates leads to a downward sloping.
