Refer to exhibit 31 5 if a positive externality

173. Refer to Exhibit 31-5. If a positive externality exists, then curve __________ represents the marginal social benefit
curve and the area __________ represents the market failure.
a. 2;
BDC
b. 1; ABC
c. 3; ABC
d. 2; ABC
e. 1;
BDC

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: Application
174. Refer to Exhibit 31-5. If a positive externality exists, then the external benefits associated with the positive
externality equal the distance between points __________, and the market output is __________.
a.
A and C; Q
2
b.
B and D; Q
1
c.
C and A; Q
1
d.
B and C; Q
1
e. b and c
ANSWER: e
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
175. Refer to Exhibit 31-5. If a positive externality exists, then curve 1 represents the __________, curve 2 represents the
__________, curve 3 represents the __________ and Q
1
represents the __________.
a. marginal private cost curve; demand curve; marginal social benefit curve; market
output
b. demand curve; marginal social benefit curve; supply curve; market output
c. marginal social benefit curve; demand curve; marginal private cost curve; socially
optimal output
d. demand curve; marginal social benefit curve; supply curve; socially optimal output
e. marginal social benefit curve; supply curve; marginal private cost curve; market
output
ANSWER: b
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
176. Refer to Exhibit 31-5. If a positive externality exists, then the external benefits associated with the positive
externality equal the distance between points ____________ and the socially optimal output is
a.
C and A; Q
1
.

b.
D and B; Q
1
.
c.
D and B; Q
2
.
d.
A and B; Q
2
.
ANSWER: 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
177. Refer to Exhibit 31-5. If a positive externality exists, then the external benefits associated with the positive
externality equal
a.
P
4
- P
2
.
b.
P
3
- P
1
.
c.
P
2
- P
1
.
d.
P
3
- P
2
.
e. a and b
ANSWER: e
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