When positive externalities exist, the private market equilibrium represents a
A) market price which is too low and a market quantity which is too low.
B) market price which is too low and a market quantity which is too high.
C) market price which is too high and a market quantity which is too low.
D) market price which is too high and a market quantity which is too high.
Answer: C
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Refer to Table 9-8
a. Which person has an absolute advantage in the production of bows? arrows? b. Which person has a comparative advantage in the production of bows? c. Which person has a comparative advantage in the production of arrows?
Most economists agree that
a. fiscal policy is a more effective stabilization tool than monetary policy. b. it is difficult to time discretionary changes in macro-policy in a manner that will promote stability. c. monetary policy should focus on reducing unemployment, while fiscal policy should focus on the control of inflation. d. discretionary macro-policy can easily be instituted in a manner that will promote economic stability.