If the consumption of good generates an external benefit, then the market equilibrium quantity will be:
A. socially optimal.
B. less than the socially optimal quantity.
C. equal to zero.
D. greater than the socially optimal quantity.
Answer: B
You might also like to view...
The justification for government action based on the argument that everyone agrees to be coerced if everyone else is forced as well is not compatible with the criterion of Pareto superiority
a. True b. False
The U.S. Constitution
a. prohibits tariffs on trade between Arkansas and New York but allows tariffs on trade between Hawaii and Alaska. b. prohibits tariffs on all trade. c. allows tariffs on trade with other countries, but not on trade between the states. d. allows tariffs only on goods purchased from the communist nations.
A country experiencing a growth rate of 12% per year can go from being one of the poorest to one of the richest in
a. one generation. In the last couple of decades China's growth rate has been higher than 12%. b. one generation. However, in the last couple of decades not even China's growth rate has been this high. c. three generations. In the last couple of decades China's growth rate has been higher than 12%. d. three generations. However, in the last couple of decades not even China's growth rate has been this high.
Faced with the evidence of poor working conditions and low wages in the border maquiladoras, economists
A) shrug their shoulders and ignore the issue. B) agree that trade theory is thus proven hollow and internally inconsistent. C) argue that U.S. consumers should not consume lettuce. D) argue that the poor conditions and low wages are actually improvements for the Mexican workers, and may be cited as gains-from-trade. E) argue that Mexico's generally high overall productivity offsets these conditions.