To maximize social welfare in the presence of a negative externality, marginal ____ must equal marginal ____
a. social cost; private cost
b. private cost; social cost
c. social cost; social benefit
d. private cost; social benefit
c
You might also like to view...
If the market price faced by a perfectly competitive firm increases, in the short run how does the firm respond?
What will be an ideal response?
According to new growth theory
A) physical capital is nonexcludable. B) knowledge capital is subject to increasing returns. C) knowledge capital is rival and excludable. D) knowledge capital is excludable.
Suppose the economy is in a long-run equilibrium when a temporary, favorable aggregate supply shock occurs. On the graphs above, show what happens to bring the economy back to long-run equilibrium, assuming that there is no policy response
In words, explain why "no response" is the best policy.
Which of the following are motivations for those seeking redistributive transfers?
a. The creation of more income equality. b. To help out those who are less fortunate c. To create a more just economic system. d. a and b e. all of the above