Suppose the socially-optimal quantity of good x is larger than the market-equilibrium quantity of good x. Does the production of good x convey a positive externality or does it convey a negative externality?
The production of good x conveys a positive externality.
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What is meant by the term "optimization"? What do economists usually believe about how individuals optimize?
What will be an ideal response?
If the reserve ratio is designated by "r," the amount of deposits a bank can lend out is equal to [D × (1 - r)]
Indicate whether the statement is true or false
Decisions to cut taxes are made by ________ and are an example of ________ policy.
A. Congress; fiscal B. the President; monetary C. the Federal Reserve; fiscal D. Congress; monetary
The root of the savings and loan debacle was
A. the corruption of management. B. the low rates of interest paid to the depositors. C. long term (30-year) outstanding loans at extremely low interest rates. D. high risk short term loans.