The social cost of producing a good that generates negative externalities is the sum of the ________
A) average variable cost and average fixed cost of production
B) average total cost and the marginal cost of production
C) private cost and external costs of production
D) total fixed cost and total variable cost of production
C
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Assume a consumption function of the following form: C = 100 + .8Y. If income is equal to $3,000, then consumption is
A) $2,400. B) $2,500. C) $2,900. D) $3,100.
Tom has a PhD in history and teaches at the local college where he earns $75,000 a year. Truth be told, Tom loves teaching so much, he would gladly do it for $45,000. Which of the following can be said?
A. Tom's economic rent is worth $30,000. B. Tom's producer surplus is worth $30,000. C. The value of Tom's marginal product is $75,000. D. All of these statements are true.