A perfectly competitive steel mill that produces large amounts of pollution (a negative externality) will, from a social point of view,
a. produce too little steel.
b. produce the socially optimal quantity of steel.
c. produce too much steel.
d. produce too much steel only if it installs pollution control equipment.
c
You might also like to view...
If elasticity of demand is 0.2, elasticity of supply is 0.5, and a 10 percent excise tax is levied on the good:
A. the tax burden on consumers will be greater. B. the tax burden on suppliers will be greater. C. the tax burden will be the same for both. D. one cannot say who will bear the greater burden without knowing the tax.
In general, game theory is the study of
a. how people behave in strategic situations. b. how people behave when the possible actions of other people are irrelevant. c. oligopolistic markets. d. all types of markets, including competitive markets, monopolistic markets, and oligopolistic markets.
A U.S. firm opens a factory that produces power tools in Korea
a. This increases U.S. net capital outflow and decreases Korean net capital outflow. b. This decreases U.S. net capital outflow and increases Korean net capital outflow. c. This increases only U.S. net capital outflow. d. This increases only Korean net capital outflow.
Economies of scope cannot exist in:
A. the presence of diseconomies of scale. B. firms that produce multiple products. C. the presence of economies of scale. D. firms that produce a single product.