A shift from S1 to S2 reflects the change that happens when a negative externality is taken into account. A shift from D1 to D2 reflects the change that happens when a positive externality is taken into account.Refer to the above figures. If a positive externality that existed becomes corrected, price and quantity will become
A. P1 and Q1.
B. P2 and Q2.
C. P3 and Q3.
D. P4 and Q4.
Answer: D
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A negative externality exists and government wants to impose a per-unit tax in order to bring about the socially optimal output. To accomplish its objective, government must set the tax equal to marginal
A. private cost. B. social benefit. C. external cost. D. social cost. E. private benefit.
Which of the following would cause a short-run decrease in the quantity supplied of personal computers?
A) The price of CPUs decreases. B) The price of software decreases. C) The number of PC manufacturers decreases. D) The cost of manufacturing PCs decreases.
Which of the following is not a question addressed by macroeconomists?
a. Why is average income high in some nations but low in others? b. What, if anything, can the government do to promote growth in incomes, low inflation, and stable employment? c. What is the impact of foreign competition on the U.S. auto industry? d. Why do production and employment expand in some years and contract in others?
Which of the following statements is true?
A) Oil is classified as part of the resource category land. B) A person working for a company is classified as part of the resource category capital. C) A machine in a factory is classified as part of the resource category land. D) A person with the particular talent for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things is classified as part of the resource category labor. E) a and d