Use Figure 16.2 above to answer the following question. Assume that MPC represents the marginal private cost and MB is the marginal private benefit for a particular firm

Assume however, that the MDC represents the marginal damage cost of this firm's activity and the MSC is the marginal social cost. How much output would the firm produce if it had to internalize the negative externality.


The firm will produce 5 units since it would now recognize the MSC curve as being its own marginal private cost curve.

Economics

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Perfectly competitive firms produce up to the point where the price of the good equals the marginal cost of producing the last unit. This condition is referred to as

A) allocative efficiency. B) constant returns to scale. C) perfectly competitive efficiency. D) productive efficiency.

Economics

If the government removes a binding price floor from a market, then the price received by sellers will

a. decrease, and the quantity sold in the market will decrease. b. decrease, and the quantity sold in the market will increase. c. increase, and the quantity sold in the market will decrease. d. increase, and the quantity sold in the market will increase.

Economics

If Cuba’s population grows faster than its output, its per capita output will ______.

a. rise b. fall c. remain the same d. rise then fall

Economics

Which of the following is NOT a principal method of financing today?

A) common stock B) bond C) reinvestment D) the entrepreneur's wealth

Economics