A negative externality is said to exist if
A. the social costs exceed the private costs.
B. the private marginal cost exceeds the private marginal benefit.
C. the producer and the consumer surplus for a particular good are not equal.
D. a tax imposed on the production of a particular good results in a deadweight loss.
Answer: A
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If at the profit-maximizing level of output, a monopolist's average-total-cost curve lies above its demand curve, then:
a. the firm should shut down in the short run. b. the firm would earn economic losses. c. the firm would earn economic profits. d. the firm should increase its output. e. the firm should decrease its output.
A cartel maximizes industry profit by
a. eliminating quotas b. producing at the kink in its demand curve c. producing where MR = MC d. cutting production costs to become more efficient e. producing more output than a monopoly would
More than one-third of the unemployed are recent entrants into the labor force
a. True b. False Indicate whether the statement is true or false
A good with qualities that consumers lack the experience to assess without assistance is called
A) a credence good. B) a search good. C) an experience good. D) a persuasive good.