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Economics
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28 Oct 2020

10. If a good has an external benefit(positive externality associated with the production of the good), a market left unregulated will produce

a. less than the efficient amount.

b. the efficient amount.

c. more than the efficient amount.

d. an amount that may be more than, less than, or equal to the efficient amount depending on how large the external benefit is relative to the private benefit.

Booster class
Microeconomics
Skill
Defining Positive externality
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Raushan Raj
Raushan RajLv8
28 Oct 2020
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Related questions

When there is a positive externality in the market for a good, which of these statements is true? (choose all the correct answers)

a. The private market tends to produce less than is socially efficient.

b. The social planner sets marginal social benefit equal to firms' marginal cost.

c. Firms set their marginal private cost equal to the marginal external cost.

d. The private market tends to produce more than is socially efficient.

e. Production of this good should be banned

1.Is the backward bending supply curve for labor realistic or just a theory? Explain. (2+ sentences)

2.Cable TV is nonrival and excludable. Contact lenses are rival and excludable. Public goods are nonrival and nonexcludable. Nonrival private goods are excludable.

True

False

3.In an efficient market, the supply curve will decrease by the amount of the external cost.

True

False

4.If the private benefit of getting a flu shot for a person is less than the social benefit, the market quantity will be greater than the efficient quantity.

True

False

2a)

A market in which there are neither external benefits nor external costs is:

Select one:

a. efficient.

b. inefficient.

c. efficient and equitable.

d. impossible.

2b)

According to the special-interest theory of government, government officials and policymakers:

Select one:

a. are assumed to maximize social good.

b. tend to listen to small groups of people who contribute money to their political campaigns.

c. manage resources to maximize efficiency.

d. have a strong incentive to ensure that society's members equally benefit from a project.

2c)

Scientific research is subsidized by the government because

Select one:

a. it yields benefits to consumers and producers who did not participate in the research.

b. researchers are under-paid by private firms, so the government must make up the difference.

c. much scientific research takes place at state-funded universities.

d. scientific research has no market value so would not be undertaken without government intervention.

2d)

The forces of supply and demand will provide a quantity that is

Select one:

a. less than the efficient quantity if a good generates external benefits.

b. more than the efficient quantity if a good generates external benefits.

c. exactly the efficient quantity if a good generates external benefits.

d. either more than or less than the efficient quantity if a good generates external benefits. It is impossible to know whether it will be too much or too little without more information.

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