When do positive externalities occur? Select the best possible answer.When social benefits equal private benefits.When social benefits are greater than private benefits.When sellers reduce production due to reduced demand.When sellers increase production owing to an increase in price.

If the social benefit of consuming a good or a service exceeds the private benefit,Group of answer choicesthe market achieves economic efficiency.a negative externality exists.a positive externality exists.the sum of consumer surplus and producer surplus is maximised.

When a positive externality exists, the socially optimal level of output will be than that resulting from a private market.

When externalities exist _____.Multiple choice question.outside intervention may be able to improve the market outcome increasing efficiency and economic surplusefficiency and economic surplus are sometimes affected but not alwaysoutside intervention increases efficiency but not economic surplusoutside intervention usually decreases efficiency and economic surplus

Why do externalities mainly lead to market failure? Select the best possible option.The price equilibrium for a certain good or service does not accurately reflect the real cost or real benefit of that good or service.The benefactor of the externalities has no control over and does not choose to incur either the cost or the benefit.Individual incentives that drive market decisions may increase social costs.All of the above.

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.