Suppose a firm's costs are F + v ? q2 where F and v are positive real numbers and the firm sells its product at the market determined price p. Profits are calculated using

Refer to Figure 13.1. All else equal, a decrease in government purchases would best be represented by a movement from

A) point A to point B. B) point B to point A. C) point B to point C. D) point C to point B.

Which of the following statements best defines private costs?

A) They are internal in the sense that the buyer or seller must explicitly take them into account. B) They are costs borne by people other than those who commit the action. C) They are synonymous with social costs. D) They represent explicit costs incurred by producers in the private sector.