Which of the following statements is NOT true of external benefits?
A) External benefits lead to an underallocation of resources to the production of the good that has the external benefit.
B) External benefits lead to a price in the market that is too high.
C) External benefits lead to too few of the goods that have the external benefit being produced.
D) External benefits are a good thing for the allocation of resources because people are getting something at no cost.
Answer: D
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If the risk associated with a particular outcome is ________, or the value of a particular outcome is ________, then cost-benefit analysis might lead people to take precautions that are not cost-justified
A) overestimated, overestimated B) overestimated; underestimated C) underestimated; overestimated D) underestimated; underestimated
Compared to 1929, total output per person in the U.S. today is approximately ________ times larger.
A. 15 B. 2 C. 25 D. 5