From society's perspective, the deadweight loss associated with a positive externality occurs because:
a. producers bear the true cost of producing the good involved in the transaction
b. producers do not bear the true cost of producing the good involved in the transaction.
c. consumers do not internalize the externality.
d. consumers internalize the externality.
c
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If a competitive firm's marginal costs always increase with output, then at the profit maximizing output level, producer surplus is
A) zero because marginal costs equal marginal revenue. B) zero because price equals marginal costs. C) positive because price exceeds average variable costs. D) positive because price exceeds average total costs. E) positive because revenues are increasing faster than variable costs.
Securitization is the practice of:
A. packaging individual debts into a single uniform asset that can be easily bought and sold. B. the government guaranteeing repayment of risky home loans made to individuals with lower credit. C. borrowing based on expected future earnings. D. backing a security with a riskless asset.