When Lisa Drives to Work Every Morning,she Drives on a Congested

question 343

Multiple Choice

When Lisa drives to work every morning,she drives on a congested highway.What Lisa does not realize is that when she enters the highway each morning she increases the travel time of all other drivers on the highway.In this case,the external cost of Lisa's highway trip

• A) increases the social cost above the private cost.
• B) lowers the social cost below the private cost.
• C) increases the social value above the private benefit.
• D) decreases the social value below the private benefit.

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Definitions:

Secondary Markets

Markets where securities are traded after being initially offered or sold in the primary market.

Stock Market Transaction

A financial operation such as buying, selling, or trading stocks that takes place in the stock market.

Local Broker

A brokerage firm that operates in a specific geographic area and may specialize in trading securities for local clients.

Specialist

An official in a stock exchange. The specialist is assigned the stocks of specific companies and is responsible for conducting an orderly market in those securities.