There Are No Externalities in the Market for Brim Hats;

question 100

Multiple Choice

There are no externalities in the market for brim hats; therefore, the:

• A) external marginal cost equals the marginal cost.
• B) social marginal cost equals the private marginal cost.
• C) social benefit equals the external marginal benefit.
• D) equilibrium level of output will be too low.

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Definitions:

Attach Property

The legal process by which a court grants a creditor the right to seize property of a debtor for the fulfillment of a judgment.

Unsecured Creditors

Creditors who have lent money without obtaining specific assets as collateral, thus bearing a higher risk of loss if the debtor defaults.

Secured Creditors

Creditors who have a legal interest in a debtor's property as collateral for a debt, giving them priority over unsecured creditors in claim payments.

Right of Surety

involves the right of a guarantor (surety) to be reimbursed by the principal debtor for any payments the surety made on the debtor's behalf, under a suretyship arrangement.