Markets are often inefficient when negative externalities are present because
a. private costs exceed social costs at the private market solution.
b. externalities cannot be corrected without government regulation.
c. social costs exceed private costs at the private market solution.
d. production externalities lead to consumption externalities.
c
You might also like to view...
The approach used in the U.S. to measure the economy's aggregate performance is
A) the total value of securities. B) national income accounting. C) to add up the value of intermediate goods. D) to add up the total value of financial transactions, transfer payments, and secondhand goods. E) all of the above.
The government proposes a tax on flowers in order to boost its revenue. If the elasticity of demand is 1.3 and the elasticity of supply is 0.7: a. Consumers will bear the majority of the burden of the tax
b. Producers will bear the majority of the burden of the tax. c. Consumers and producers will bear equal shares of the burden of the tax. d. It does not tell us enough to reveal whether consumers or producers will bear most of the burden of the tax.