A positive externality is present whenever:
a. the social marginal benefit of an activity exceeds the private marginal benefit.
b. the private marginal benefit of an activity exceeds the private marginal cost.
c. the social marginal cost of an activity exceeds the private marginal cost
d. none of the above.
a
You might also like to view...
At tax rates higher than the tax rate that maximizes tax revenues along a Laffer curve
A) an increase in tax rates increases tax revenues. B) any variation in tax rates has no effect on tax revenues. C) a reduction in tax rates increases tax revenues. D) a reduction in tax rates reduces tax revenues.
Reservation price is: a. the maximum amount a customer would be willing to pay for a unit of output. b. the minimum price at which a seller would be willing to supply the product. c. always equal to the marginal cost
d. the same as market price.
In the long run, the output is determined by
A. demand-C,I,G,NX B. available factors of production - capital, labor, etc. C. interest rates D. quantity of money
If there are external costs of production not accounted for, then marginal
A. cost is less than marginal social cost. B. cost equals marginal social cost. C. social cost is zero. D. cost is greater than marginal social cost.