If the external costs of production are NOT taken into account, then production will
A) be less than socially desirable.
B) be more than socially desirable.
C) be the same since only prices are affected by externalities.
D) cease.
Answer: B
You might also like to view...
Resources are allocated most efficiently across the country and around the world when traders specialize in producing those goods for which they have a comparative advantage, and trade for the other things that they need
Indicate whether the statement is true or false
The marginal product of the 14th worker is 8 and the firm sells its output for $4 per unit. If labor is the only variable cost, then the value of the 14th worker's marginal product is
A. $12. B. $32. C. $4. D. $2.
Expenditure-reducing policies designed to improve a current account deficit
A) turn domestic spending towards domestic goods. B) reduce the overall level of demand in the economy. C) turn domestic spending towards foreign goods. D) increase the overall level of demand in the economy.
If the absolute value of the price elasticity of demand for a product is 2, and the price of a product increased 10 percent, then the quantity demanded will decline by
A. 2 percent. B. 5 percent. C. 10 percent. D. 20 percent.