In a free market where a firm's activity causes detrimental externalities,
a. marginal benefits will be less than marginal social costs.
b. smaller outputs than those that maximize profits will be socially desirable.
c. marginal social cost will be greater than marginal private cost.
d. All of the above are correct.
d
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If a firm’s production creates detrimental externalities, then in a competitive market,
A. the firm will produce at an inefficiently high level. B. the firm will produce at an inefficiently low level. C. the firm will produce until marginal social cost equals marginal benefits. D. the firm will produce until marginal benefits exceed marginal social cost.
According to the World View titled "Income Share of the Rich," in which of the following would the top tenth of the population be most likely to receive the highest percentage of the country's income?
A. Namibia. B. Canada. C. South Africa. D. Japan.
In a market system, resources will move away from an industry when:
A. Profits of firms in the industry are rising B. Demand for the industry's product is decreasing C. The production of output in the industry is rising D. Profits of firms in other industries are falling
An increase in the demand for HDTV sets leads to an increase in demand for LCD and LED TV screens. This situation arises because:
A. LCD and LED screens minimize the costs of production B. The supply of LCD and LED screens has decreased C. The demand for LCD and LED screens is a derived demand D. Of foreign production of LCD and LED screens