Suppose that beef producers create a negative externality. What is the relationship between the equilibrium quantity of beef and the socially optimal quantity of beef?
a. They are equal.
b. The equilibrium quantity is greater than the socially optimal quantity.
c. The equilibrium quantity is less than the socially optimal quantity.
d. There is not enough information to answer the question.
b
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In a figure, the consumer surplus is equal to the area ________ the ________ curve and ________ the price
A) above; demand; above B) below; supply; below C) below; demand; below D) below; demand; above E) above; supply; below
What is producer surplus? How is it measured?
What will be an ideal response?
The federal government increases spending by $50 billion, and the main effect is an increase in the price level. It must be true that the economy is operating on the
A. horizontal portion of the aggregate demand curve. B. horizontal portion of the aggregate supply curve. C. vertical portion of the aggregate supply curve. D. vertical portion of the aggregate demand curve.
For Elliot's dog-walking service, the only variable input is labor. Elliot's labor costs are $300 a day and his service walks 30 dogs per day. To walk 31 dogs per day, his labor costs increase to $305 a day. The marginal cost of walking that 31st dog is
A. $5. B. $9.83. C. $19.52. D. indeterminate from the information given.