A result of a positive externality in the production of a good is that
A) the price system will over-allocate resources to the production of that good or service.
B) the price system will under-allocate resources to the production of that good or service.
C) the market supply will be too high.
D) the market demand will be too high.
B
You might also like to view...
How are discouraged workers counted in the unemployment rate?
Suppose that you build a high-speed, magnetically powered transportation system from New York to Los Angeles, and you are the only firm providing this service. High fixed costs resulting from the enormous quantity of capital used in this system enable decreasing average cost for any conceivable level of demand. Your monopoly would result from:
a. increasing returns to scale. b. technological superiority. c. control of a scarce resource or input. d. government-set barriers.
When firms in an industry reach an agreement to fix prices, divide up market share, or otherwise restrict competition, they are using the strategy of:
A. interindustry competition. B. collusion. C. price leadership. D. limit pricing.
Which of the following statements is TRUE about the historical relationship between the trade deficits and government budget deficits?
A. There is a positive relationship between trade deficits and budget deficits. B. There is a negative relationship between trade deficits and budget deficits. C. There is no relationship between trade deficits and budget deficits. D. A relationship exists only when there is a balanced budget.