Price Bubble Occurs When

question 31

Multiple Choice

Price bubble occurs when

• A)price of an asset soars far above "fundamentals" like corporate earning or household income.
• B)people can no longer afford to purchase an asset.
• C)economy enters recessionary period.
• D)economy experiences prolonged and slow recovery.

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Definitions:

Exclusive Licenses

Agreements granting one party alone the right to sell, produce, or use intellectual property or product.

Tradable Permits

Government-issued rights or allowances that permit the holder to emit a certain amount of a substance; can be bought, sold, or traded.

Common Resource

A resource like air or water that is not owned by anyone, but is available for use by everyone, often leading to overuse and depletion.

Marginal Social Benefit

The extra advantage to the community when one additional unit of a product or service is made.