If the market price of a good does NOT include all of the costs and benefits that arise from the production or consumption of the good, then
A) the market is perfectly competitive.
B) an externality is present.
C) society is consuming and producing the optimal amount of the good.
D) resources are properly allocated.
Answer: B
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Of the following, which is CORRECT?
A) Nominal GDP does not change when the production of goods and services increases. B) Nominal GDP is not affected by changes in prices of goods and services. C) Nominal GDP increases when the prices of goods and services increase. D) Real GDP changes only when the prices of goods and services really change.
"Price discriminators lose money by being nice to their customers." Is the previous statement correct or incorrect?
What will be an ideal response?
If policymakers do nothing in response to an inflationary gap, what will happen?
A. A rapid movement toward lower unemployment and higher inflation B. A rapid movement toward lower unemployment and lower inflation C. A slow movement toward higher unemployment and higher inflation D. A slow movement toward lower unemployment and lower inflation
The proportion of the labor force that is unemployed is the
A. Unemployment rate. B. Okun's Law. C. Employment index. D. Underemployed rate.