When the consumption of a good creates an external benefit,
A) the marginal social cost curve lies below the marginal private cost curve.
B) the marginal social benefit curve lies above the marginal private benefit curve.
C) the quantity produced in an unregulated, competitive market is greater than the efficient quantity.
D) None of the above answers is correct.
B
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If a natural monopoly decreases the quantity of output it produces, then:
A. its profit will increase. B. its average cost will decrease. C. it will have to decrease its price. D. its average cost will increase.
The alternative to the use of money by the members of a society is
A) barter. B) borrowing. C) division of labor. D) from each according to ability, to each according to need. E) payment by check.
Which component of consumption spending is the greatest in a typical economy?
A) services B) nondurable goods C) durable goods D) new housing
In a free market, a firm's rate of output is determined
a. where marginal social cost equals marginal social benefit b. where marginal private benefit equals marginal social benefit c. where marginal social cost equals marginal private cost d. where marginal private cost equals marginal private benefit e. by government