When a negative externality creates a market failure, that failure can be corrected by
a. setting price equal to private cost
b. setting price equal to social cost
c. setting price equal to the externality cost
d. creating a positive externality of comparable value
e. setting private cost equal to social cost
B
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If a health insurer charges a rate equal to the average cost of health care for the entire population, then it is likely that
A) everyone buys health insurance. B) unhealthy people will not buy health insurance. C) healthy people will not buy health insurance. D) nobody will buy health insurance.
For a firm in a perfectly competitive labor market
A) W > MFC. B) W < MFC. C) W > MRP. D) W = MFC.
All of the following affect the demand for labor by a firm except
A. the amount of labor that will be supplied at different wages. B. the level of demand for the firm's products. C. the marginal physical product of the labor. D. the marginal revenue the firm receives for its products.
If all fixed taxes in the United States were removed and only variable taxes remained, what would be the effect on the expenditures schedule?
A. The expenditure schedule will shift upward. B. The expenditure schedule will shift downward. C. The expenditure schedule will become flatter. D. The expenditure schedule will become steeper.