1) When an activity creates a negative externality, a. Its social costs exceed i
ID: 1240644 • Letter: 1
Question
1) When an activity creates a negative externality,a. Its social costs exceed its private cost
b. its private costs exceed its social cost
c. its private benefits exceeds its social benefits
d. its social benefits exceed its private benefits
e. its social benefits exceed its social cost
2) The following statement is correct:
a. Low income countries face higher trade barriers in exporting tothe U.S. and Europe than high income countries face in exporting tothe U.S. and Europe.
b. Japan favors imports from low income countries compared toimports from high income countries.
c. The U.S. and Europe favor imports from low income countriescompared to imports from high income countries.
d. A and B
e. B and C
HELP WILL BE GREATLY APPRECIATED :)
Explanation / Answer
The high income countrieswould rather purchase goods from low income countries since theircurrency is worth more they are able to purchase more goods withtheir currency at the low income country than at the high incomecountry. There arent any trade barriers that face low incomecountries that the high income countries face so the answer isE
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