If the social cost is greater than the private cost in a particular market, the private equilibrium will be at a quantity:
A. greater than or less than the socially optimum level, depending on the size of the external costs.
B. equal to the socially optimal level.
C. greater than the socially optimal level.
D. less than the socially optimal level.
Answer: C
You might also like to view...
An inflation-induced increase in the effective tax rate on interest income and capital gains results in
a. a leftward shift of the saving schedule. b. a rightward shift of the saving schedule. c. no shift of the saving schedule. d. a rightward shift of the investment schedule.
The powers of the Federal Reserve System do not include: a. the ability to buy and sell U.S. government securities
b. the ability to extend loans to commercial banks. c. the ability to provide deposit insurance for customers of member banks. d. the ability to impose reserve requirements on both member and nonmember commercial banks. e. the authority to clear checks.
The Ricardian Equivalence proposition suggests that a tax increase that causes a budget surplus will
A) cause an increase in output. B) cause no change in output. C) cause a reduction in output. D) a reduction in consumption.
The whole class of goods that will be underproduced or not produced at all in a completely unregulated market economy are referred to as
A. Pareto goods. B. public goods. C. free goods. D. private goods.