When production of a good generates external costs, the
a. demand curve for the good will overstate the true social benefits from consumption of the good.
b. demand curve for the good will understate the true social benefits from consumption of the good.
c. supply curve for the good will overstate the true social cost of producing the good.
d. supply curve for the good will understate the true social cost of producing the good.
D
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Use national demand and supply curves to show (a) the incentives for trade to begin between nations. (b) the effect on the likely pattern of trade of a change in technology in A that causes A's national supply curve to shift out
(c) the effect on the likely pattern of trade of a change in tastes in B in favor of good S.
Arbitrage
a. Is the act of to buying low in one market and selling high in another market b. Can force a seller to go back to uniform pricing c. Can defeat direct price discrimination d. All of the above