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malabranche13 malabranche13
wrote...
Posts: 478
4 years ago

Figure 5-5



Figure 5-5 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2.



Refer to Figure 5-5. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient output is Q2. In that case, diagram shows



the effect of a negative externality in the consumption of a good.



the effect of an excess demand in a market.



the effect of a subsidy granted to producers of a good.



the effect of a positive externality in the consumption of a good.

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InMicro

InMicro


Edition: 1st
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antheadanthead
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4 years ago
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malabranche13 Author
wrote...
4 years ago
Thanks
wrote...
4 years ago

Figure 5-5



Figure 5-5 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2.



Refer to Figure 5-5. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does D1 represent?



the demand curve reflecting private benefits



the demand curve reflecting social benefits



the demand curve reflecting external benefits



the demand curve reflecting the sum of private and social benefits

Woo
wrote...
4 years ago

the demand curve reflecting private benefits

wrote...
4 years ago

Figure 5-5



Figure 5-5 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2.



Refer to Figure 5-5. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does D2 represent?



the demand curve reflecting private benefits



the demand curve reflecting social benefits



the demand curve reflecting external benefits



the demand curve reflecting the sum of social and external benefits

wrote...
4 years ago

the demand curve reflecting social benefits

wrote...
4 years ago
Thanks
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