If there are external costs of production and firms do not have to account for these costs, then the firms will ________ and ________ compared with the efficient values.
A. overproduce; underprice
B. underproduce; underprice
C. underproduce; overprice
D. overproduce; overprice
Answer: A
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Which of the following is not an indicator that is used by the World Bank in measuring the level of economic development?
a. life expectancy at birth. b. adult literacy rate. c. infant mortality rate. d. all of the above are not used by the World Bank.
Because resources are scarce, if society produces more of one commodity, it has to sacrifice some amount of another commodity. The amount sacrificed is
a. a normative problem b. the out-of-pocket cost c. the opportunity cost d. the lost profit e. the total factor productivity
If Macland’s growth rate is consistently 8 percent, how many years will it take to double its standard of living?
a. 2 years b. 8 years c. 9 years d. 12 years
Which of the following is intended to improve the rate of return for inventors of new technology?
a. Tax breaks for firms that engage in R&D b. Low rates for capital investment projects c. Shorter periods for patent protection d. Less government oversight in R&D projects