When a negative externality exists, _______________________ and thus _______________ intervention may be needed to achieve efficiency
A) external costs are necessarily greater than private costs; government
B) social costs equal private costs; no government
C) social costs are less than private costs; government
D) social costs are greater than private costs; government
E) none of the above
D
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In the above figure, in order to achieve efficiency, a tax of ________ per unit is needed
A) $3 B) $6 C) $0 D) $2
If an increase in the federal deficit stimulates an economy, _____
a. an expansionary gap exists in the economy b. the crowding in of private investment takes place c. the crowding out of private investment offsets crowding in of private investment d. the crowding out and crowding in of private investment cancels each other out e. interest rates increase significantly
Monetary policy can influence interest rates, which in turn can change spending
a. True b. False Indicate whether the statement is true or false
If the average variable cost curve is above the marginal cost curve, then
A) marginal costs must be decreasing. B) average variable costs must be increasing. C) marginal costs must be increasing. D) marginal costs can be either increasing or decreasing.