When positive externalities are involved the market

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56. When positive externalities are involved, the market is said toa.fail, because it underproduces the good connected with the positive externality.b.fail, because it overproduces the good connected with the positive externality.c.succeed, because it produces the socially optimal quantity of the good connectedwith the positive externality.d.be "in optimum," because the equilibrium fully adjusts for the positive externality.ANSWER:a
POINTS:1DIFFICULTY:ModerateNATIONAL STANDARDS:United States - BUSPROG: AnalyticLOCAL STANDARDS:United States - OH - Default City - DISC: Markets, market failure,a - DISC: Markets, market failure, and externalitiesKEYWORDS:Bloom's: Comprehension57. Suppose the production of a good results in positive externalities. If output occurs at theintersection of the supply curve and the marginal social benefits curve, thena
POINTS:1DIFFICULTY:ModerateNATIONAL STANDARDS:United States - BUSPROG: AnalyticLOCAL STANDARDS:United States - OH - Default City - DISC: Markets, market failure,a - DISC: Markets, market failure, and externalitiesKEYWORDS:Bloom's: Comprehension58. Which of the following statements isfalse?b
POINTS:1DIFFICULTY:ChallengingNATIONAL STANDARDS:United States - BUSPROG: AnalyticLOCAL STANDARDS:United States - OH - Default City - DISC: Markets, market failure,a - DISC: Markets, market failure, and externalitiesKEYWORDS:Bloom's: Comprehension

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Term
Fall
Professor
FOUDY
Tags
Economics, Market failure, Externality, positive externality

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