If a firm is NOT forced to pay for external costs, it will
A. request a subsidy from the government.
B. continue to overproduce the good.
C. continue to under produce the good.
D. raise prices.
Answer: B
You might also like to view...
Apples are a normal good, so if the price of an apple increases from 50¢ to 60¢, the quantity of apples demanded decrease because of
A) the substitution effect only. B) the income effect only. C) a change in income. D) the substitution and income effects.
________ involves undertaking an activity until its marginal benefits equal marginal costs
A) Market intervention B) Scarcity reduction C) Central planning D) Marginal analysis
Last year, Alice bought 40 CDs when her income was $20,000 . This year, her income increased to $25,000 . and she purchased 48 CDs. We can conclude that:
a. Alice's price elasticity of demand for CDs is equal to 1. b. Alice's demand for CDs is price-inelastic. c. Alice's demand for CDs is price-elastic. d. the income elasticity of demand for CDs is negative. e. CDs are a normal good.
The reserve ratio is
A. the ratio of loans to available reserves. B. the ratio of available reserves to loans made. C. the percentage of every dollar deposited in a checking account that a bank may loan out. D. the percentage of every dollar deposited in a checking account that a bank must maintain in reserves.