Answer:
d
Explanation:
A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low
Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality.
Answer:
A) market interest rates are high and falling
Explanation:
Bonds and interest rates have an indirect relationship. When interest rates rise, bond prices tend to fall.
Bonds pay interests on a fixed rate. When market interest rates are rising, investors will prefer investing in other options due their high return as opposed to the fixed returns from bonds. Bonds become less attractive, leading to a decline in prices.
Buying Bonds when the interests are rising means buying at a cheaper rate. When interest rates start falling, bond prices will rise again due to their inverse relationship.
Capital gains occur when an investment is bought at a lower price and sold at a higher price. Buying bonds when interests rate is high and selling when interests are low will lead to capital gains.
Answer:
The principal balance is $151,573
Explanation:
For computing the principal balance, we need the following calculation which is shown below:
1. First we have to compute the 1 month interest payment which equals to
= Note amount × rate × 1 month ÷ total months in a year
= $152,000 × 14% × 1 ÷ 12
= 1773.33
2. Now deduct the first month interest from installment amount which equals to
= Installment amount - Interest amount
= $2,200 - $1773.33
= $426.67
3. Now subtract step 2 amount from notes amount which equals to
= Notes amount - principal amount
= $152,000 - $426.67
= $151,573.33
Hence, the principal balance is $151,573
Answer:
the difference in value between a country's imports and exports.
is an accounting of a country's international transactions for a particular time period.
Answer:
The income the firm must provide to resource suppliers to attract resources from alternative uses.
Explanation:
Economic cost refers to the cost that is attached with the goods and it is attach by one of the individual. It takes into account various factors such as time, money and other costs.
Economic cost is differ from the accounting cost because accounting cost only includes explicit costs but economic cost includes both explicit costs and implicit costs (opportunity costs).
