When a positive externality is present
A) the market price is too low.
B) the market price is too high.
C) the market price is in equilibrium.
D) none of these choices.
B
You might also like to view...
Under conditions of perfect competition, if any one producer increases output,
a. market price rises. b. market price falls. c. market price does not change. d. market price changes unpredictably up or down.
An antitrust agency is identifying the product market for Good X and determines that Good X and Good Y have a cross-price elasticity of 18.6. As a result of the cross-price elasticity, the antitrust agency is likely to ________ Good Y from Good X's product market as the products ________ compete as close substitutes.
A) include; do not B) exclude; do C) exclude; do not D) include; do
Which of the following helps explain why the aggregate quantity demanded of goods and services is inversely related to prices within the framework of the AD/AS model?
a. As prices fall, domestic consumers have an incentive to buy more of the cheaper goods and services. b. As prices fall, the monetary authorities will have to increase the money supply, which will lead to an increase in the quantity of goods and services purchased. c. As prices fall, the government will have to reduce taxes, which will lead to an increase in the quantity of goods and services purchased. d. As prices fall, the wealth of people holding the fixed quantity of money increases, causing them to expand their purchases of goods and services.
The country is experiencing rapid inflation. What could the Fed do reduce the money supply and slow inflation?
a. buy government bonds b. lower the reserve ratio c. sell government bonds d. lower the discount rate