When there is a positive externality

A) the marginal private benefit received by consumers is greater than the external benefit.
B) the marginal social benefit received by consumers is greater than the marginal private benefit.
C) the marginal private benefit received by consumers is greater than the marginal private cost.
D) the marginal private benefit received by consumers is greater than the marginal social benefit.


Answer: B

Economics

You might also like to view...

Montana cattle ranchers are complaining about mountain state sheep ranchers whose animals are eating too much grass on the open range. The sheep ranchers claim that the cattle are eating too much of the grass. This is an example of

a. an external benefit. b. the reciprocal nature of externalities. c. the principal agent problem. d. a situation in which strict liability would be the more efficient solution.

Economics

If consumers believe the price of tablet computers will increase in the future, this will cause the demand for tablet computers to decrease now

Indicate whether the statement is true or false

Economics

Which of the following is true concerning the distribution of income?

a. Various measures of income inequality can be used to objectively determine the fairness of an income distribution. b. When the political process is democratic, income transfer programs will redistribute income from the rich to the poor. c. The fairness of an income distribution is a normative concept; it cannot be determined objectively by economic criteria. d. Income inequality is the fairest method to allocate income.

Economics

When the Fed increases the money supply and creates inflation, it erodes the real value of the unit of account and makes it more difficult for investors to sort successful from unsuccessful firms

a. True b. False Indicate whether the statement is true or false

Economics