31 suppose the production of a good results in

31. Suppose the production of a good results in negative externalities. If society produces the
output consistent with the intersection of the demand curve and the marginal private cost curve,
then
a. the socially optimal level of output will be produced.
b. society will incur a net social cost.
c. society will want more output produced, and producers will be willing to satisfy this
desire at a price that society deems acceptable.
d. all of the above
e. There is not enough information to answer this question.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
LOCAL STANDARDS: United States - OH - Default City - DISC: Markets, market failure,
a - DISC: Markets, market failure, and externalities
KEYWORDS: Bloom's: Comprehension
32. Suppose the production of a good results in negative externalities. If output is at the
intersection of the demand curve and the marginal social cost curve, then
a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
LOCAL STANDARDS: United States - OH - Default City - DISC: Markets, market failure,
a - DISC: Markets, market failure, and externalities
KEYWORDS: Bloom's: Comprehension
33. If society is experiencing a net social cost from the production of a good, this implies that

b. producers would rather produce the output at which marginal social cost equals the
demand for the good.
c. negative externalities are involved in the production of this good.
d. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
LOCAL STANDARDS: United States - OH - Default City - DISC: Markets, market failure,