The marginal social cost is equal to marginal private cost + demand marginal external cost + marginal social cost marginal external cost marginal external cost + demand marginal external cost + marginal private cost

The marginal social cost is equal to marginal private cost + demand marginal external cost + marginal social cost marginal external cost marginal external cost + demand marginal external cost + marginal private cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The marginal social cost is equal to
O marginal private cost + demand
marginal external cost + marginal social cost
marginal external cost
O marginal external cost demand.
marginal external cost + marginal private cost

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A public good which creates no externalities is _____________________ by a free competitive market. A. Underprovided B. Overprovided C. Optimally provided
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Which statement about a product with external costs must be correct? A. The consumption of the product has positive effects on third parties B. The private costs of its production exceed the social costs of its production. C. The production of the product has negative effects on third parties. D. The social costs of its production exceed the social benefits of its production.
Refer to Figure. Which of the following statements is correct? Price 22 24 22 81 18 16 Social cost (private cost and external cost) Supply (private cost) Demand (private value) 120 160 Quantity a. The private cost of producing the 160th unit of output is $16 b. The social cost of producing the 160th unit of output is $22. c. d. The external cost of producing the 160th unit of output is $6. All of the above are correct.
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Which of the following is true? Question 18 options: A) marginal private (or internal) costs = marginal social costs + marginal external costs B) marginal social costs = marginal private (or internal) costs – marginal external costs C) marginal external costs = marginal social costs + marginal private (or internal) costs D) marginal social costs = marginal private (or internal) costs + marginal external costs
The following question refers to the diagram below, which illustrates the marginal private cost, marginal social cost, and marginal social benefits for a goods whose production results in a negative externality. Which area represents the deadweight loss due to the externality? A j. Bh. C h+j. D There is no deadweight loss. $ g MSC MPC k m MSB Q2 Q1
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An external cost arises from the use of fossil fuels because of global warming. If fossil fuels are sold in a competitive market, A. The marginal social cost of fossil fuels will exceed their marginal private cost. B. The marginal social cost of fossil fuels will be less than their marginal private cost C. The marginal social benefit of fossil fuels will exceed their marginal social cost D. a and b E. b and c
Which of the following statements is correct? a. Marginal external cost equals marginal private cost minus marginal social cost. b. Marginal social cost plus marginal external cost equals marginal private cost. c. Marginal social cost minus marginal private cost equals marginal external cost. d. Marginal social cost plus marginal private cost equals marginal external cost.