If the social benefit is greater than the private benefit in a particular market, then the socially optimal equilibrium will be at a quantity:
A. greater than the private level.
B. equal to the private level.
C. greater than or less than the private level, depending on the size of the external costs.
D. less than the private level.
Answer: A
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Which of the following determines the opportunity set of possible choices for leisure and income?
a. The wage rate b. The aggregate price level c. The unemployment rate d. The utility from leisure
Suppose expected inflation and actual inflation are both low, and unemployment is at its natural rate. If the Fed then pursues an expansionary monetary policy, which of the following results would be expected in the short run?
a. The short-run Phillips curve would shift to the left. b. The short-run Phillips curve would shift to the right. c. The economy would move up and to the left along a given short-run Phillips curve. d. The economy would move down and to the right along a given short-run Phillips curve.
A borrower who makes a $1,000 loan for one year and earns interest in the amount of $75, earns what nominal interest rate and what real interest rate if inflation is two percent?
A. A nominal rate of 7.5% and a real rate of 5.0%. B. A nominal rate of 5.5% and a real rate of 2.0%. C. A nominal rate of 7.5% and a real rate of 9.5%. D. A nominal rate of 7.5% and a real rate of 5.5%.
Relative to a cure for AIDS, the demand for an AIDS vaccine would be
A. more inelastic. B. equal in elasticity. C. more elastic. D. not as elastic.