Compared to ideal economic efficiency, when the production of a good generates external costs, competitive markets will result in an output that is too:
a. large and a price that is too high. b. large and a price that is too low.
c. small and a price that is too high. d. small and a price that is too low.
b
You might also like to view...
Suppose a monopoly is producing its profit-maximizing output level. Now suppose the government imposes a lump-sum tax on the monopoly, independent of its output
As a result the monopolist will increase the price of its product to cover its higher cost. Indicate whether the statement is true or false
Which of the following activities would be calculated as part of GDP accounts?
a. Drug trafficking. b. Money laundry. c. Prostitution. d. Purchasing plastic surgery. e. Burglary.
One of the results of the strong economic growth in the United States relative to the rest of the world is a
a. U.S. trade surplus. b. U.S. trade deficit. c. growing U.S. net exports. d. trade deficit for U.S. trading partners.
Certifying a used car through a brand dealership is one way to:
A. credibly screen out lemons. B. unreliably signal that the car is not a lemon. C. unreliably screen out lemons. D. credibly signal the car is not a lemon.