Graphically, the effects of an external benefit can be shown as
A. a rightward shift of the market demand curve.
B. a market demand curve that is to the left of the market demand that includes external benefits.
C. a downward movement along the market demand curve.
D. a leftward shift of the market supply curve.
Answer: B
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When a policy creates the most social gain possible, it is considered "best" by the
a. efficiency criterion. b. Pareto criterion. c. Edgeworth criterion. d. maximin criterion.
The "expected real" interest rate is the
A) rate actually quoted in financial markets. B) rate actually quoted in financial markets minus the expected inflation rate. C) rate actually quoted in financial markets plus the expected inflation rate. D) rate actually quoted in financial markets divided by the expected inflation rate.
A subsidy:
A. reduces the amount that buyers pay and increases the amount that sellers receive for a good. B. increases the amount that buyers pay and reduces the amount that sellers receive for a good. C. reduces both the amount that buyers pay and the amount sellers receive for a good. D. increases both the amount that buyers pay and the amount sellers receive for a good.
"As long as total revenue slopes up, marginal revenue must slope up also." Explain whether this statement is true or false