When a negative externality is present in a market, when a quota is imposed, it is:
A. efficient, because the market consumes the efficient level.
B. efficient, because the net benefit of everyone at the amount set by the quota is equal.
C. not efficient, because individuals' net benefits from the amount set by the quota are different.
D. not efficient, because the marginal cost outweighs the marginal benefit for too many consumers at the amount set by the quota.
Answer: C
You might also like to view...
If the central bank increases the money supply at the same time as government spending increases, then:
a. interest rates must increase. b. interest rates must decrease. c. income must increase. d. income must decrease.
If the market for labor is perfectly competitive, the profit maximizing level of labor occurs where
A) MRPL < W (the wage). B) MRPL = P (the output price). C) MRPL just exceeds W. D) MRPL = W. E) none of the above
Answer the following statement(s) true (T) or false (F)
1. Relative to mobile sources, stationary sources are bigger emitters of sulfur oxides. 2. Acidic compounds are formed from a chemical reaction in the earth’s atmosphere, involving sulfur dioxide, nitrogen oxide, water vapor, and oxidants. 3. Acid rain is a local pollution problem. 4. Of the two major pollutants responsible for acid rain, sulfur dioxide (SO2) is the more significant. 5. Major sources of SO2 emissions are automobiles and other mobile sources.
A person who is willing to take a bet with a negative expected value is risk-loving.
Answer the following statement true (T) or false (F)