Refer to exhibit 31 2 if the exhibit represents a

53. Refer to Exhibit 31-2. If the exhibit represents a positive externality situation, the social benefit of expanding output
from Q
1
to Q
2
is the area of
a.
Q
1
ABQ
2
b.
Q
1
AEQ
2
c.
Q
1
CBQ
2
d. ABE.
ANSWER:
.
.
.
c

POINTS: 1
DIFFICULTY: Challenging
NATIONAL STAN
DARDS:
United States - BUSPROG: Analytic
LOCAL STANDA
RDS:
United States - OH - Default City - DISC: Markets, market failure, a - DISC:
Markets, market failure, and externalities
KEYWORDS: Bloom's: Application
54. Refer to Exhibit 31-2. If the exhibit represents a positive externality situation, the private cost of expanding output
from Q
1
to Q
2
is the area of
.
.
.
a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STAN
DARDS:
United States - BUSPROG: Analytic
LOCAL STANDA
RDS:
United States - OH - Default City - DISC: Markets, market failure, a - DISC:
Markets, market failure, and externalities
KEYWORDS: Bloom's: Application
55. Refer to Exhibit 31-2. If the exhibit represents a positive externality situation, the net social benefit of expanding
output from Q
1
to Q
2
is the area of
.
.
c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STAN
DARDS:
United States - BUSPROG: Analytic
LOCAL STANDA
RDS:
United States - OH - Default City - DISC: Markets, market failure, a - DISC:
Markets, market failure, and externalities
KEYWORDS: Bloom's: Application
56. When positive externalities are involved, the market is said to
a
POINTS: 1

DIFFICULTY: Moderate
NATIONAL STAN
DARDS:
United States - BUSPROG: Analytic
LOCAL STANDA
RDS:
United States - OH - Default City - DISC: Markets, market failure, a - DISC:
Markets, market failure, and externalities
KEYWORDS: Bloom's: Comprehension
57. Suppose the production of a good results in positive externalities. If output occurs at the intersection of the supply
curve and the marginal social benefits curve, then
a. the socially optimal level of output will be produced.
b. society will incur a net social cost.
c. society will want less produced, and producers will be willing to satisfy that
desire.
d. there is market failure.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STAN
DARDS:
United States - BUSPROG: Analytic
LOCAL STANDA
RDS:
United States - OH - Default City - DISC: Markets, market failure, a - DISC:
Markets, market failure, and externalities
KEYWORDS: Bloom's: Comprehension