When private goods have external benefits:
A. marginal social cost is greater than marginal private cost.
B. marginal privates cost is greater than marginal social cost.
C. marginal social benefit is greater than marginal private benefit.
D. marginal private benefit is greater than marginal social benefit.
Answer: C
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Which of the following assumptions is true of government spending and taxes?
a. They do not depend upon on the level of GDP b. They may be changed only through direct action by the Congress. c. They change only when the price level changes. d. They change only upon executive order by the president of the United States. e. They are autonomous at low levels of GDP but not at higher levels of GDP.
Suppose you place $10,000 in a retirement fund that earns a nominal interest rate of 8 percent. If you expect inflation to be 5 percent or lower, then you are expecting to earn a real interest rate of at least:
a. 1.6 percent. b. 4 percent. c. 5 percent. d. 3 percent.
A ________ money supply curve implies that the quantity of money supplied is independent of the interest rate
a. horizontal b. vertical c. upward sloping d. downward sloping
If U.S. citizens decide to save a smaller fraction of their incomes, U.S. domestic investment
a. increases, and U.S. net capital outflow increases. b. increases, and U.S. net capital outflow decreases. c. decreases, and U.S. net capital outflow increases. d. decreases, and U.S. net capital outflow decreases.