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Solutions for Chapter 10: Externalities

Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw

Full solutions for Principles of Economics | 6th Edition

ISBN: 9780538453059

Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw

Solutions for Chapter 10: Externalities

Solutions for Chapter 10
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Textbook: Principles of Economics
Edition: 6
Author: N. Gregory Mankiw
ISBN: 9780538453059

This textbook survival guide was created for the textbook: Principles of Economics, edition: 6. Chapter 10: Externalities includes 17 full step-by-step solutions. This expansive textbook survival guide covers the following chapters and their solutions. Since 17 problems in chapter 10: Externalities have been answered, more than 14579 students have viewed full step-by-step solutions from this chapter. Principles of Economics was written by and is associated to the ISBN: 9780538453059.

Key Business Terms and definitions covered in this textbook
  • deadweight loss

    the fall in total surplus that results from a market distortion, such as a tax

  • elasticity

    the quantity of output that minimizes average total cost

  • fixed costs

    costs that do not vary with the quantity of output produced

  • fundamental analysis

    the study of a company’s accounting statements and future prospects to determine its value

  • inflation rate

    the percentage change in the price index from the preceding period

  • internalizing the externality

    altering incentives so that people take account of the external effects of their actions

  • liberalism

    the political philosophy according to which the government should choose policies deemed just, as evaluated by an impartial observer behind a “veil of ignorance”

  • market economy

    an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

  • market failure

    a situation in which a market left on its own fails to allocate resources efficiently

  • mutual fund

    an institution that sells shares to the public and uses the proceeds to buy a portfolio of stocks and bonds

  • negative income tax

    a tax system that collects revenue from high-income households and gives subsidies to lowincome households

  • normative statements

    claims that attempt to prescribe how the world should be

  • poverty rate

    the percentage of the population whose family income falls below an absolute level called the poverty line

  • property rights

    the ability of an individual to own and exercise control over scarce resources

  • quantity supplied

    the amount of a good that sellers are willing and able to sell

  • sacrifice ratio

    the number of percentage points of annual output lost in the process of reducing inflation by 1 percentage point

  • sunk cost

    a cost that has already been committed and cannot be recovered

  • unit of account

    the yardstick people use to post prices and record debts

  • value of the marginal product

    the marginal product of an input times the price of the output

  • vertical equity

    the idea that taxpayers with a greater ability to pay taxes should pay larger amounts

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