If a good is produced by firms that generate external costs, the price consumers pay
A. will be efficient as long as it equals the marginal costs of the firms.
B. will be too low.
C. will be the correct price, but the quantity sold of the good will be too large.
D. will be too high because the consumers end up paying the costs instead of the firm.
Answer: B
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The money demand curve has a negative slope because
A) lower interest rates cause households and firms to switch from financial assets to money. B) lower interest rates cause households and firms to switch from money to financial assets. C) lower interest rates cause households and firms to switch from money to bonds. D) lower interest rates cause households and firms to switch from money to stocks.
Graphically, consumer surplus is the area below the demand curve and above the price
a. True b. False Indicate whether the statement is true or false
Which of the following is included in the investment component of GDP?
a. spending on new business equipment such as power tools and spending on stocks and bonds b. spending on new business equipment such as power tools but not spending on stocks and bonds c. spending on stocks and bonds but not spending on new business equipment such as power tools d. neither spending on new business equipment such as power tools nor spending on stocks and bonds
In economics, capital is defined as a financial asset such as stocks and bonds
Indicate whether the statement is true or false