Which of the following statements is not correct?
a. Private markets tend to over-produce products with negative externalities.
b. Private markets tend to under-produce products with positive externalities.
c. Private parties can bargain to efficient outcomes even in the presence of externalities.
d. Private parties are usually more successful in achieving efficient outcomes than government policies in the presence of externalities.
d
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Suppose a firm uses labor and capital to produce output. The last unit of labor hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units
Use the optimal combination of inputs rule to calculate the price of capital if the price of labor is $6 per unit. The price of capital is A) $2. B) $10. C) $20. D) impossible to determine with the information given.
The aggregate demand for good X is Q = 20 - P, and the market price is P = $8. What is the maximum amount that consumers are willing to pay for the quantity demanded at this price?
A) $72 B) $96 C) $144 D) $168