A good that has social costs that are less than private costs has a quantity that is
A) too high.
B) too low.
C) just right.
D) equal to zero.
Answer: B
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The behavior of the M1 velocity of money in recent years can be explained by: a. stability of interest rates
b. a low and stable rate of inflation. c. monetary policy that has been successful in stabilizing the economy. d. financial innovation creating new substitutes for M1 money. e. a large number of banks and savings and loan associations going bankrupt.
Structural unemployment may be particularly severe for
a. younger workers b. college graduates. c. older workers. d. workers with "high tech" skills.
If the price elasticity of demand for U.S. automobiles is higher in Europe than it is in China, and transport costs are zero, a price-discriminating monopolist would charge
A) the same price for autos in China as in Europe. B) a lower price for autos in China than in Europe. C) a higher price for autos in China than in Europe. D) a less profitable price for autos in China than in Europe.
Related to the Economics in Practice on page 198: If the long-run average cost curve in an industry has a long, flat section, which of the following must be true?
A. Existing firms have no incentive to expand. B. There is no single point on the curve that is the best. C. There would be no difference between the industry's short-run average cost curve and its long-run average cost curve. D. Small firms have higher average costs than large firms.