A market with an externality can
A. underproduce or overproduce a good.
B. stabilize.
C. operate efficiently without government intervention.
D. move from a production point inside the production possibilities curve to a pareto optimal point.
Answer: A
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The demand for loanable funds is the relationship between loanable funds and the ________ other things remaining the same
A) real interest rate B) nominal interest rate C) inflation rate D) price level
People with fixed incomes fare best in an inflationary period
a. True b. False Indicate whether the statement is true or false
Welfare economics is the study of how the allocation of resources affects economic well-being. a. the allocation of resources affects economic well-being. b. price controls work
c. the government helps poor people. d. to produce greater equality.
If the economy is in equilibrium at less than full employment, Keynesian economists would recommend that the government
a. do nothing b. pursue fiscal policy to stimulate aggregate demand c. pursue fiscal policy to stimulate aggregate supply d. balance the budget e. cut government spending to eliminate deficit spending