Markets tend to overallocate resources to the production of a good when
A) there are negative externalities.
B) there are positive externalities.
C) there are public goods produced.
D) equilibrium occurs.
A
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Among a set of alternatives with the same total costs, an individual is said to optimize if she chooses an alternative that has the:
A) highest total benefit. B) highest risk. C) lowest opportunity costs. D) highest net costs.
Which of the following is an example of roundabout production?
a. A farmer switches from growing soybeans to growing wheat, getting fewer crops per year as a result. b. A farmer switches from growing soybeans to growing wheat, getting more crops per year as a result. c. A self-employed dressmaker becomes a wage worker at a factory that makes dresses. d. A coal mine is sold by its owners to its workers and run as a cooperative. e. A telemarketing firm declares a holiday for two days while a new phone system is installed.