If the production of oranges generates an external benefit, then we would expect the market equilibrium quantity of oranges to be:
A. less than the socially optimal quantity.
B. greater than the socially optimal quantity.
C. equal to the socially optimal quantity.
D. equal to the socially optimal quantity plus the external benefit.
Answer: A
You might also like to view...
Economists expect the relationship between consumption and disposable income to be
a. unpredictable. b. transitory. c. fixed. d. inverse e. stable.
Which is a barrier to entry in an industry?
A. Allocative efficiency B. Economic profits C. Profit maximization D. Economies of scale
Exhibit 21-3 Potatoes and wheat output (tons per day) CountryPotatoes Wheat United States4 2 Ireland3 1 In Exhibit 21-3, the United States has an absolute advantage in producing:
A. potatoes. B. wheat. C. both. D. neither.
In March 2018, the United States filed a formal complaint with the World Trade Organization (WTO) alleging that China
A. violated restrictions on Chinese direct investment in the United States. B. engaged in unfair policies and practices regarding intellectual property rights. C. failed to comply with U.S. import licensing requirements. D. was dumping goods on U.S. markets.