Which of the following statements is true?
A. When production of a good yields positive externalities but output is currently at the market level, then a change in output to the socially optimal level will certainly be for the worse.
B. When production of a good yields negative externalities but output is currently at the market level, then a change in output to the socially optimal level will cause benefits to increase by an amount greater than costs will increase.
C. When production of a good yields positive externalities but output is currently at the market level, then a change in output to the socially optimal level will cause benefits to increase by an amount less than costs will increase.
D. a, b, and c
E. none of the above
Answer: E
You might also like to view...
Congress passed the Freedom to Farm Act in 1996. What was the purpose of this Act?
A) to encourage more people to become farmers B) to phase out the use of price ceilings in agricultural markets C) to phase out price floors and return to a free market in agriculture D) to grant free land to farmers in order to produce crops that were particularly scarce
For which of the following goods is the income elasticity of demand likely highest?
a. natural gas b. doctor's visits c. hamburgers d. boats