If there are both external benefits and external costs associated with the production and consumption of a good, and the external benefits are greater than the external costs,
a. More than the efficient amount is being produced
b. Less than the efficient amount is being produced
c. the efficient amount is being produced
d. We do not know whether the efficient amount, or more or less, is being produced.
b
You might also like to view...
A consumer's budget constraint is drawn with the quantity of pizza measured along the horizontal axis and the price of Pepsi measured along the vertical axis. If the market is offering the consumer the trade-off of 3 pints of Pepsi for 1 pizza, then what is the slope of the consumer's budget constraint?
In a foreign exchange market diagram with pesos per dollar on the vertical axis, the quantity of __________ would be on the horizontal axis, and the U.S. demand for Mexican goods would help to determine the __________ curve
A) dollars; demand B) dollars; supply C) pesos; demand D) pesos; supply
In a two-player simultaneous game where neither player has a dominant strategy,
A) there is never a Nash equilibrium. B) there is only one Nash equilibrium. C) the actual outcome is unpredictable. D) the actual outcome will not be a Nash equilibrium.
Related to the Economics in Practice on page 238: An investor in the stock market experiences capital gains whenever
A. the company that issued the stock makes a profit. B. shares of stock are sold for mor e than their purchase price. C. shares of stock are sold. D. shares of stock are traded for stock in another company.