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.

Which of the following is true of a negative externality?Group of answer choicesThe government can use subsidies to encourage firms to internalize the externality.The government must take over the production of this good so that the externality can be internalized.Some benefits accrue to a third party.Its existence always requires corrective measures by the government.Some costs are borne by a third party.

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

When production of a good creates an external benefit,Group of answer choicesthere is a positive externality.it results in the tragedy of the commons.there is a negative externality.a club good is being produced.too much of the good is being produced.

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 market with a negative externality. The market will tend to ________ the good because the market participants tend to ignore the ________ of their decision.Group of answer choicesoverproduce; external benefitunderproduce; external benefitunderproduce; external costoverproduce; external costoverproduce; internal benefit