The market will overproduce goods that have external costs because
A. Producers experience lower costs than society.
B. Producers cannot keep these goods from consumers who do not pay, so they have to produce greater amounts.
C. The government is not able to produce these goods.
D. Producers experience higher costs than society.
Answer: A
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Assuming a fully loaned-up banking system and a deposit expansion multiplier of 2, a $10 million government expenditure financed by sales of securities to the banking system will cause the money supply to
A) remain unchanged. B) rise by $5 million. C) rise by $10 million. D) rise by $20 million.
Answer the following statements true (T) or false (F)
1) A multi-plant firm is a firm with more than one demand curve. 2) Regardless if a multi-plant firm is perfectly competitive or has market power, to maximize profits, managers need to set the overall marginal cost from producing in each of their plants equal to the marginal revenue to find the profit-maximizing total quantity. 3) If the market price for multi-plant, perfectly competitive firm is $4, to maximize its profits, the firm should set the overall marginal cost of production equal to $4. 4) If the market price for multi-plant, perfectly competitive firm is $5, to maximize its profits, the firm should set the overall marginal cost of production to exceed $5. 5) If a multi-plant firm has market power, to maximize profit, it should set a price that exceeds its overall marginal cost.
Which single international issue draws considerable consensus among most people and governments around the world?
a. that more funds should be directed toward foreign aid b. that global inequality should be reduced c. that poverty should be combatted by globalization d. that fair trade should be encouraged and expanded
Which component of aggregate demand is involved in the wealth effect caused by a price level change?
a. government purchases b. investment c. consumption d. disposable income