Which of the following is true of the market equilibrium in the presence of negative externalities?
a. It is the intersection of the social cost curve and the demand curve
b. It is the intersection of the private cost curve and the demand curve.
c. Net social welfare is maximized at the equilibrium.
d. Market output is less than the socially optimal output at the equilibrium.
b
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Suppose you have $200 with which you can buy shares of stock from two companies: ABC Hot Chocolate Company and XYZ Lemonade. Each company's stock currently sells for $100 per share. If the temperature next year is lower than average, the stock price for ABC will increase by $20, and the stock price for XYZ will not change. If the temperature next year is higher than average, the stock price for XYZ will increase by $20, and the stock price for ABC will not change. There is a 50% chance that it will be colder than average next year, and a 25% chance that it will be warmer than average. If you purchase one share of ABC stock and one share of XYZ stock, your expected gain will be ________.
A. $0 B. $40 C. $10 D. $15
Economists reason that the optimal decision is to continue any activity up to the point where the
A) marginal benefit equals the marginal cost. B) marginal cost is zero. C) marginal benefit is greater than the marginal cost. D) marginal benefit is zero.
D. a higher price level will decrease the real value of many financial assets and therefore reduce spending
A. increase the amount of U.S. real output purchased. B. increase U.S. imports and decrease U.S. exports. C. increase both U.S. imports and U.S. exports. D. decrease both U.S. imports and U.S. exports.
By law, all states must have a state income tax
a. True b. False Indicate whether the statement is true or false