A consequence of a negative externality is that social costs __________ private costs, and the efficient level of output __________
A) equal; does not require any type of government intervention
B) are less than; requires the government to create a subsidy
C) are greater than; requires the government to impose a tax
D) are greater than; requires the government to create a subsidy
E) are less than; requires the government to impose a tax
C
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In the opinion of many consumers, there are few, if any, substitutes for the popular search engine Google. If Google were to charge consumers for its services, it would face:
a. a relatively inelastic demand curve. b. a relatively elastic demand curve. c. a negative income elasticity of demand. d. a positive cross elasticity of demand. e. a perfectly elastic demand curve.
If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then
a. a one-unit increase in output will increase the firm's profit. b. a one-unit decrease in output will increase the firm's profit. c. total revenue exceeds total cost. d. total cost exceeds total revenue.