A positive externality causes
A) the marginal social benefit to be less than the marginal private cost of the last unit produced.
B) the marginal private benefit to exceed the marginal social cost of the last unit produced.
C) the marginal social benefit to exceed the marginal private cost of the last unit produced.
D) the marginal social benefit to be equal to the marginal private cost of the last unit produced.
C
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What will arise when negative externalities are present in a market?
a) Government will regulate the externalities in the market. b) Private costs will be greater than social costs. c) The market will not be able to reach any equilibrium situation. d) Social costs will be greater than private costs.
The Federal Reserve cannot target both the money supply and the interest rate because it does not control
A) bank reserves. B) open market operations. C) money demand. D) the discount rate.