In markets where a positive externality is involved we expect: Select one: a. Inefficient overproduction of the good b. Taxes can incentivize market participants to bring about the efficient outcome c. Inefficient underproduction of the good d. The private benefit of the good exceeds the social benefit of the good
Ans) the correct option is c. Inefficient underproduction of the good
When there is a positive externality there is an underproduction of the good.
In markets where a positive externality is involved we expect: Select one: a. Inefficient overproduction of...
In markets where a positive externality is involved we expect: Select one: a. Inefficient overproduction of the good O b. Taxes can incentivize market participants to bring about the efficient outcome o c. Inefficient underproduction of the good d. The private benefit of the good exceeds the social benefit of the good
In markets where a positive externality is involved we expect:
Which one of the following statements about positive externalities is false? A. A positive externality is a positive side effect of an economic transaction that affects those not directly involved in the transaction B. Installing a solar panel produces a positive externality C. Unregulated markets produce too few of the goods and services that have positive externalities. D. Markets with positive externalities do not need government intervention to operate efficiently E. Positive externalities represent an additional benefit to society, over...
Which one of the following statements about positive externalities is false? a. A positive externality is a positive side effect of an economic transaction that affects those not directly involved in the transaction. b. Unregulated markets produce too few of the goods and services that have positive externalities. c. Installing a solar panel produces a positive externality. d. Markets with positive externalities do not need government intervention to operate efficiently. e. Positive externalities represent an additional benefit to society, over...
We are considering a market with marginal cost of P=100+2Q and a demand of P=500-2Q. Use that information to answer the following questions. a. Find the market equilibrium (price and quantity in the market). b. Find producer and consumer surplus. c. Now imagine production of this good created a negative externality of 1$ per unit of output. Find the socially optimal outcome (price and quantity) taking this externality into account. d. Find consumer and producer surplus at the socially efficient...
QUESTION 18 Someone smoking in a crowded room is an example of: a positive production externality. a negative production externality. a negative consumption externality. not an externality. QUESTION 19 The cyclical deficit is the portion of the deficit created by business cycle fluctuations in GDP. that is the result of nondiscretionary federal spending. the result of discretionary federal spending- that would exist if the economy were at potential GDP. QUESTION 20 A subsidy paid to buyers to correct a market...
To enforce the optimum level of emissions a government could set an emissions standard at the quantity ______. where the MSB curve crosses the MCA curve. located at the vertical intercept of the MSB curve. located at the horizontal intercept of the MSB curve. located at the horizontal intercept of the MCA curve. Suppose the market of sugar is competitive and currently at market equilibrium. What would happen to the equilibrium quantity and price if the government implements a...
9. The pricing system Consider the market for hamburgers in an economy where the market equilibrium is characterized by a quantity of hamburgers of 50 million and a price of $5.00 per hamburger. Suppose that currently 80 million hamburgers are being produced and sold at a price of $2.50. This outcome in the market for hamburgers is economically because: Some hamburgers produced incur opportunity costs of production that exceed their value or marginal benefit to consumers. The opportunity cost of...
Question 3 [20 marks] (i) What is a public good and why does the market fail in the presence of a public good? (5) (ii) Explain how we can resolve this issue where the existence of a public good causes market failure. (5) (iii) Why will private markets produce an inefficient output of a public good? Explain how the efficient level of a public good is determined. (5) (iv) Education is frequently cited as a source of external benefits. In...
Unit 8 Market Failures: Externalities, public goods, natural resources The production of coffee pods results in environmental damages when consumers throw the pods away. Currently consumers are not responsible for the costs of disposing of these coffee pods. The environmental damages caused by throwing away the coffee pods is an example of a: a Positive externality (6. Negative externality c. Private cost d. Private benefit Consider the market for coffee in the graph to the right. 1. Left unregulated, what...