Which of the following statements is not true?
a. If social cost and private cost are the same, any externality that exists will be positive
b. If external costs are not zero, externalities exist.
c. If somebody could buy the Pacific Ocean, fewer dolphins would be killed in fishing nets.
d. Every production process generates market failure.
e. When pesticides are used in producing food, the quantity of food produced is greater than the socially optimal level.
D
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Alan puts $20,000 in an uninsured savings account at the Boston National Bank. Susie borrows $20,000 from the Boston National Bank, flies to a Central African country, and is never heard from again. Which of the following is true in this case? a. Alan will lose her $20,000
b. Alan will lose her $20,000 if she and Norma are related. c. Alan will lose her $20,000 if the First National Bank makes all of its loans to people who run off to South Pacific islands. d. Alan will not lose her $20,000 no matter what happens to the First National Bank. e. Alan will not lose her $20,000 unless the Fed fails
A pure private good is one
a. that is nonrival and nonexcludable b. that is rival but excludable c. that is rival and excludable d. that is nonrival but excludable e. one whose production imposes a cost on third parties