The creation of private property rights corrects negative externality problems in many cases because they
a. cannot create negative externalities
b. create a strong incentive for the private owners to maintain the property
c. can force the government to compensate the owners for the externality costs
d. encourage people to become free riders
e. always lead to the social optimal price and output levels
B
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What can we say about APC + APS and MPC + MPS?
A) Each must sum to 1. B) MPC + MPS = 100% of total income. C) APC + APS = 100% of the change in income. D) MPC + MPS always equals 1, but the sum of APC + APS can vary.
Refer to the above graph of the representative firm in monopolistic competition. Point c is the intersection of the:
A. marginal cost and average total cost curves. B. average total cost and demand curves. C. marginal cost and demand curves. D. marginal cost and marginal revenue curves.