An externality is a situation in which
A) private costs diverge from social costs.
B) internal costs diverge from private costs.
C) there are no social costs.
D) the cost borne by the consumer is greater than the monetary price.
A
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A monopolist finds the price-output combination that maximizes its profits by
A) equating total revenue and total cost. B) equating marginal revenue and marginal cost. C) finding the combination for which the difference between marginal revenue and marginal cost is the greatest. D) equating price and marginal cost.
Answer the following questions true (T) or false (F)
1. If additional units of a good could be produced at an increasing opportunity cost, the production possibilities frontier would be linear. 2. On a diagram of a production possibilities frontier, economic growth is represented by the slope of the production possibilities frontier. 3. An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier.