1. Which of these statements is TRUE in the case of externalities? I. In the cas
ID: 1094108 • Letter: 1
Question
1. Which of these statements is TRUE in the case of externalities?
I. In the case of externalities, prices do not reflect the true cost or benefit of the product.
II. In the case of externalities, prices sometimes send the wrong signals about a market.
III. Externalities discourage new producers from entering the industry since the price always remains about the efficient price. II and III only I and II only I, II, and III I and III only
A) II and III only
I and III only
The Centers for Disease Control and Prevention (CDC) wants at least 90 percent of the population vaccinated against preventable diseases, since the chance of a disease outbreak decreases as vaccine coverage increases. We can conclude that:
Externalities are:
Which of the following statements is TRUE?
A)If the EPA cares about the sum of consumer and producer surplus, they should ignore the impact of pollution reduction on the profitability of firms.
A chemical bathroom cleaner has an ingredient X that allows the cleaner to lather well and remove stains. The cost of producing a bottle of this bathroom cleaner is $3.60, but the bottle retails for $5.50. When consumers use the bathroom cleaner, the lather that gets washed down the drain escapes into the environment and releases allergens that cause respiratory problems for people. What is the social cost of a bottle of this cleaner?
When external benefits are present, the market price is ________, however when external costs are present, the market price is ________.
1 pts If antibiotic users get all the benefits of antibiotics but do not bear all of the costs, the social marginal cost of antibiotic use at the market equilibrium will be:
If antibiotic users get all the benefits of antibiotics but do not bear all of the costs, the social marginal cost of antibiotic use at the market equilibrium will be:
The market equilibrium is not efficient when the consumption of a good creates external costs, which cause social costs to be:
Fewer people get flu shots than is efficient because:
B) I and II onlyExplanation / Answer
B
A
C
B
A
A
A
D
B
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