The above figure shows the market for steel ingots. An externality can be seen because
A) the social marginal cost exceeds the private marginal cost.
B) the private marginal cost exceeds the social marginal cost.
C) the optimal quantity of steel is zero.
D) not enough steel gets produced by the competitive market.
A
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Groups have preferences
a. True b. False
Answer the following statements true (T) or false (F)
1) Effective managers use marginal analysis to determine how much to spend on actions to lower the probability of bad outcomes.
2) The expected marginal benefit of reducing the probability of an accident is equal to the decrease in the expected cost of the accident.
3) 
The above table shows the quantity of patents reviewed by a firm's attorney and the corresponding probability that the firm will infringe on another firm's patent. The cost of infringement is $50,000.
The expected marginal benefit of reviewing additional patents increases as the number of patents reviewed increases.
4) If actions to reduce the expected cost of an accident are equally effective, managers should authorize the most expensive actions first.
5) It is not optimal to drive the probability of a patent infringement to zero.
6) In some situations, managers cannot make incremental actions to prevent product failure and must either decide to take preventative action or not.
Output for a simple production process is given by Q = 2KL, where K denotes capital, and L denotes labor. The price of capital is $25 per unit and capital is fixed at 8 units in the short run. The price of labor is $5 per unit. What is the total fixed cost of producing 80 units of output?
A. $25 B. $200 C. $33 D. $85
If the firm were a perfect competitor, how much would its price be in the long run?
