Suppose the production of a good in a competitive market has a negative externality. Which of the following is true? a) The social marginal cost curve lies to the left of the market supply curve, and the market equilibrium quantity is less than the allocatively efficient output. b) The social marginal cost curve lies to the left of the market supply curve, and the market equilibrium quantity is at the allocatively efficient output. c) The social marginal cost curve lies to the left of the market supply curve, and the market equilibrium quantity is more than the allocatively efficient output. d) The social marginal cost curve lies to the right of the market supply curve, and the market equilibrium quantity is less than the allocatively efficient output. e) The social marginal cost curve lies to the right of the market supply curve, and the market equilibrium quantity is more than the allocatively efficient output.

Consider a good with external benefits. Which of the following best describes why the market does not produce an allocatively efficient amount?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aThe marginal private cost of production equals both the marginal private benefit of production and the marginal social benefit of production.bThe marginal private cost of production equals the marginal private benefit of production but is less than the marginal social benefit of production.cThe marginal private cost of production exceeds the marginal social benefit of production but equals the marginal private benefit of production.dThe marginal private benefit of production exceeds both the marginal private cost of production and the marginal social benefit of production.

Which of the following is true when the production of a good results in negative externalities? aThe government must produce the good. bThe private market will produce too little of the good. cThe private market price will be too low. dThe government must prevent the production of the good.

In the second of the three ranges of production:Question 22Select one:a.the total product curve has an increasing slope.b.the marginal product curve has a negative slope.c.the marginal product curve intersects the total product curve.d.marginal product is negative.

Economic profits in a short-run equilibriumQuestion 1Select one:a.are never negative because a firm would shutdown if profits are negative.b.may be positive, zero, or negative.c.will never exceed the difference between marginal revenue and marginal cost per unit of output.d.are always zero.

The rational rule for a perfectly competitive market is to produce:Question 5Answera.at the output where the efficient quantity equals the benefit.b.less if the marginal benefit exceeds the marginal cost.c.the output level with minimum average cost and buy the quantity with the maximum benefit.d.more if the unit's marginal benefit exceeds its marginal cost.