In the figure above, if the market is unregulated, at the equilibrium output the marginal external cost is
A) zero.
B) $250 per unit.
C) $150 per unit.
D) $100 per unit.
D
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Deadweight loss is the net loss of:
a. consumer surplus. b. producer surplus. c. disequilibrium surplus. d. both a and b.
In the long run, economic profits are:
a. possible both for a monopolist and for a perfectly competitive firm. b. possible for a monopolist but not for a perfectly competitive firm. c. possible for a perfectly competitive firms but not for a monopolist. d. impossible for both a monopolist and for a perfectly competitive firm.
Restructuring social security benefits might stimulate economic growth; however, we must consider the cost of this action, which is
a. adequate benefits for everyone except those who originally needed social security b. an increased burden on other social programs such as food stamps c. a reduction in saving d. a reduction in other governmental programs e. a movement of the production function to the left
Taxes can be justified if the government uses the revenue to (i) provide public goods such as national defense. (ii) clean up negative externalities such as water pollution. (iii) regulate a common resource such as fish in a public lake. (iv) provide goods with positive externalities such as medical research
a. (ii) only b. (ii) and (iii) only c. (i), (ii), and (iii) only d. (i), (ii), (iii), and (iv)