Assume the production of a good causes a negative externality. In the market equilibrium, the marginal consumer values the good at
a. less than the social cost of producing it.
b. less than the private cost of producing it.
c. more than the social cost of producing it.
d. more than the private cost of producing it.
a
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A market failure occurs when
a. shortages or surpluses of some good cannot be eliminated. b. a private market cannot provide a good in socially efficient quantities. c. consumers' surplus falls to zero. d. property is privately owned and people behave competitively.
The short-run effect of an increase in the money supply is to
A) increase real GDP only. B) increase the price level only. C) increase both real GDP and the price level. D) increase nominal GDP but decrease the price level.
What is the interest rate on a 12-month U.K. certificate of deposit if the dollar return on the certificate is 4 percent and the dollar has appreciated 9 percent against the British pound?
a. 15 percent b. 13 percent c. 9 percent d. 5 percent e. 4 percent
Select the graph above that best shows the change in the market specified in the following situation: In the market for chicken, when the price of a substitute, such as beef, decreases.
Graph A Graph B Graph C Graph D