If society is experiencing a net social cost from the production of a good, this implies that
A. the socially optimal level of output is being produced and society is willing to accept the costs that result.
B. producers would rather produce the output at which marginal social cost equals the demand for the good.
C. negative externalities are involved in the production of this good.
D. none of the above
Answer: C
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What will be an ideal response?
The more complicated a production process is,
a. the lower the transactions cost of using markets b. the lower the cost of production c. the more likely the market will be used to organize production d. the more likely that transaction costs decrease through centralized control of production e. the more likely that transaction costs decrease through use of markets