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wrightjb wrightjb
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5 years ago

Question 1.

If the marginal social benefit of consuming a good or a service exceeds the marginal private benefit

• a negative externality exists.

• the market achieves economic efficiency.

• a positive externality exists.

• the sum of consumer surplus and producer surplus is maximized.

Question 2.

Assume that production from an electric utility caused acid rain. If the government imposed a tax on the utility equal to the marginal external cost of the acid rain, the government's action would

• externalize the externality.

• result in a marginal social benefit greater than the marginal cost of the electricity.

• be an example of supply-side economic policy.

• internalize the externality.
Textbook 
Microeconomics

Microeconomics


Edition: 7th
Authors:
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jfinn1021jfinn1021
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wrightjb Author
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5 years ago
You make an excellent tutor!
fxinternational
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Thank you, thank you, thank you!
Katey_maree
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Just got PERFECT on my quiz
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