ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 17, Problem 2.5P
(a)
To determine
The marginal external cost of production
(b)
To determine
If there is no regulation on externality, calculate the level produced.
(c)
To determine
The level that should be produced to achieve economic efficiency.
(d)
To determine
The net gain dollar value to the society.
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What kind of externality is in the market above?
a. negative consumption externality
b. positive production externality
c. positive consumption externality
d. negative production externality
Demand
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Supply
MSB
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A situation in which the Marginal Social Cost is greater than the Marginal Private Cost is
a. Positive Consumption Externality
○ b. Positive Production Externality
c. Negative Production Externality
○ d. Negative Consumption Externality
Clear my choice
7. An externality occurs when the benefits or costs of an economic
activity are external and not felt by
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