Private markets fail to reach a socially optimal equilibrium when positive externalities are present because the
a. private benefit equals the social benefit at the private market solution.
b. private cost exceeds the private benefit at the private market solution.
c. social value exceeds the private value at the private market solution.
d. private cost exceeds the social benefit at the private market solution.
c
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During the mid 1980s the price of gasoline fell. Americans purchased not only more gasoline but other goods as well. Use consumer theory to explain why this happened
What will be an ideal response?
Comparing firms in perfectly competitive markets to monopoly firms, which results in a deadweight loss?
The concept of absolute advantage relies on
A) the idea of comparative advantage. B) the ability to produce more units of an item with a given amount of resources. C) the idea of opportunity cost. D) the concept of economic efficiency as measured on the production possibility curve.
The above table shows the daily production possibilities for a nation. According to the above table, the opportunity cost of each additional car in terms of televisions
A. is meaningless because the cost of cars cannot be expressed in terms of televisions. B. remains constant. C. falls as more cars are produced. D. increases as more cars are produced.