Homework Answers
Answer
Option 1
True cost supply curve is the social cost supply curve and the firm's supply curve is the privat cost supply curve
where
the form of the supply curve is
P=a+bQ .......... a can be - or +
a private cost supply curve is the same
a social cost supply curve is
=private cost supply curve + per unit external cost
=P+EC
=a+bQ+EC
so the y-axis intercept goes up as we add the external cost and that shifts the curve to up it means the social cost or true cost supply curve is above the firm's supply curve
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QUESTION 1 When the production of a good generates external costs, the firm's supply curve will...
2. If there are external costs from production, we can assume that A. the market supply...
2. If there are external costs from production, we can assume that A. the market supply curve also respresents the marginal social cost (MSC) curve. B. producer surplus exceeds consumer surplus. C. the market supply curve also represents the marginal external cost (MEC) curve. D. social costs of production exceed private costs of production.
QUESTION 17 Suppose a firm produces pollution when it generates electricity. The cost of the pollution...
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Question 8 Which of these curves is the competitive firm's supply curve? O the average variable...
Question 8 Which of these curves is the competitive firm's supply curve? O the average variable cost curve above marginal cost O the average total cost curve above marginal cost O the marginal cost curve above average variable cost o the marginal cost curve above average total cost
A market supply curve reflects the external benefits of producing a good or service. marginal private...
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QUESTION 21 Compared with the efficient outcome, the market price of a good that generates external benefits is too high too low O optimal O equal to the efficient price QUESTION 22 Products that create external benefits are over-consumed because the private benefits exceed the private costs under-consumed because consumers only consider the private benefits of consumption O optimally consumed as long as private benefits equal private costs O underconsumed because the social costs exceed the social benefits
True False Answer Bank Pollution is an example of an external cost. When the production of...
True False Answer Bank Pollution is an example of an external cost. When the production of a good results in pollution, private and social costs are the same. Private costs are costs that the firm is not obligated to disclose to the public Social cost is the sum of private and external costs. The terms "social cost" and "external cost" are synonyms. Wages are an example of an external cost When the production of a good results in pollution, private...
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QUESTION 10.1 POINT Economies of scale occur when a firm's long-run average Select the correct answer below: O variable cost curve, upward sloping O unit cost curve, vertical O average cost curve, downward sloping O cost per unit, horizontal Content attribution
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Question 16 1 pts Which of the following would shift a supply curve for a good...
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2. If there are external costs from production, we can assume that A. the market supply curve also respresents the marginal social cost (MSC) curve. B. producer surplus exceeds consumer surplus. C. the market supply curve also represents the marginal external cost (MEC) curve. D. social costs of production exceed private costs of production.
QUESTION 17 Suppose a firm produces pollution when it generates electricity. The cost of the pollution is called the private marginal cost. social marginal cost. marginal cost. external marginal cost 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...
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QUESTION 21 Compared with the efficient outcome, the market price of a good that generates external benefits is too high too low O optimal O equal to the efficient price QUESTION 22 Products that create external benefits are over-consumed because the private benefits exceed the private costs under-consumed because consumers only consider the private benefits of consumption O optimally consumed as long as private benefits equal private costs O underconsumed because the social costs exceed the social benefits
True False Answer Bank Pollution is an example of an external cost. When the production of a good results in pollution, private and social costs are the same. Private costs are costs that the firm is not obligated to disclose to the public Social cost is the sum of private and external costs. The terms "social cost" and "external cost" are synonyms. Wages are an example of an external cost When the production of a good results in pollution, private...
QUESTION 10.1 POINT Economies of scale occur when a firm's long-run average Select the correct answer below: O variable cost curve, upward sloping O unit cost curve, vertical O average cost curve, downward sloping O cost per unit, horizontal Content attribution
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Question 16 1 pts Which of the following would shift a supply curve for a good to the right? O An increase in taxes imposed on the production of the good O An increase in import restrictions on the good O an increase in import duties on the good O An increase in subsidies on the good O An increase in the price of the good
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