When positive externalities are present, it leads to an underallocation of resources in that area relative to that which is socially desirable
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose that in 2018, all prices in the economy double and that all wages and salaries also double. In 2018 you
A) are worse off than you were in 2017 as you can no longer afford to buy as many goods and services. B) are better off than you were in 2017 as your salary is higher than it was in 2017 and you can now buy more goods and services. C) are no better off or worse off than you were in 2017 as the purchasing power of your salary has remained the same. D) cannot determine whether you are better off or worse off than you were in 2017, because the purchasing power of your salary cannot be determined.
What does the dotted line represent between the two graphs?
a. an individual firm accepting the market price
b. an individual firm influencing the market price
c. an individual firm rejecting the market price
d. an individual firm dominating the market price