When Collective Action Is Taken,e

question 195

Multiple Choice

When collective action is taken,e.g. ,the passing of a new law,it is frequently an attempt to

• A) eliminate a negative externality.
• B) encourage a positive externality.
• C) increase the income of lawyers.
• D) correct a resource misallocation due to an externality.
• E) further burden the operation of the economy.

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Definitions:

Out-of-Pocket Expenses

Direct payments made by individuals for goods or services without third-party assistance, such as insurance.

Producer Surplus

The difference between the amount a producer is willing to accept for a good or service and the actual amount received, reflecting the benefit to producers.

Supply Curve

A diagram indicating the correlation between the cost of a product and the volume of its supply.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to invest in one option over another.