If firms were required to pay the full social costs of the production of goods, including both private and external costs, other things being equal, there would probably be:
a. an increase in production
b. a decrease in production.
c. a greater misallocation of resources.
d. a decrease in the market price of the product.
b
You might also like to view...
Miniville is an isolated town located on the southern shore of Lake Condescending, a very large lake. The western edge of Miniville is adjacent to impassable mountains and there are no towns or businesses for many miles to the east. The 300 residents of Miniville are evenly distributed along 3 miles of shoreline on the lake, east of the mountains. Lake Shore Drive, the only street in town, provides access to Miniville's homes and businesses. All residents live between the lake and the street; businesses locate on the other side of the street. Lake Shore Drive is 3 miles long, and the points labeled A, B, and C are 1, 2, and 3 miles from the western end of Lake Shore Drive, respectively. All residents of Miniville shop at the store located closest to their homes. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q215g1.jpg" alt="" style="vertical-align: 0.0px;" height="117" width="538" />________ residents of Miniville live west of point B, and ________ live east of point A.
A. 150; 150
B. 100; 200
C. 200; 100
D. 200; 200
Which of the following conditions ensures that excess profits cannot persist in a perfectly competitive market over the long run?
A) Large number of firms in the industry. B) Outputs of the firms are perfect substitutes for one another. C) Complete information is available to all market participants. D) Ease of entry into the market.
At the local park there is a playground that anyone may use. There is rarely anyone using the playground, so children who use the playground receive full enjoyment from its use. The playground is
a. rival in consumption and is excludable. b. not rival in consumption, but is excludable. c. rival in consumption, but is not excludable. d. not rival in consumption nor is it excludable.
Output per unit of input measures
A. Productivity. B. The investment rate. C. The inequality trap. D. Per capita GDP.