12. An example of a positive externality is a. freeway congestion. b. pollution
ID: 1117495 • Letter: 1
Question
12. An example of a positive externality is a. freeway congestion. b. pollution in a resort lake. c. airport noise. d. beautiful trees on property along a parkway. 13. When negative externalities are present in a market a. private costs will be greater than social costs. b. social costs will be greater than private costs c. only government regulation will solve the problem. d. the market will not be able to reach any equilibrium 14. A free rider is a person who a will only purchase a product on sale. receives the benefit of a good but avoids paying for it. c. can produce a good at no cost. d. rides public transit regularly. 15. Which of the following does not vary with the amount of output a firm produces? a. marginal cost and average fixed cost. b. marginal cost and average variable cost. total variable cost. c. d. total fixed cost. 16. Larry's Lunchcart is a small street vendor business. If Larry makes 15 pretzels per day in his pretzel shop and incurs a total cost of $16.50, his average total cost per pretzel per day is a. $1.10. b. $6.50. c. $15.00. d. $16.50. Which of the following firms is the closest to being a perfectly competitive firm? a. A wheat farm. b. Microsoft Corporation. c. Ford Motors Company d. Coca-Cola Company 17. A profit-maximizing monopolist will produce the level of output at which a. average revenue is equal to average total cost b. average revenue is equal to marginal cost c. marginal revenue is equal to marginal cost d. total revenue is equal to opportunity cost. 18. d to perfect competition is The most obvious characteristic of a monopolistic competition market as opp that a. firms in monopolistic competition are price takers. b. firms in monopolistic competition sell differentiated products. c. firms in monopolistic competition sell identical products d. firms in monopolistic competition face a horizontal demand curve 19-Explanation / Answer
Answer : 12) d. beautiful trees on property along a parkway. Because positive externality is that by which society is benefited, i.e., in case of positive externality one person of the society pay for a particular thing but enjoyed by whole society. Here beautiful trees are on property which bears the cost for property owner but it is enjoyed by other without cost.
13) b. social cost will be greater than private cost. Because, when an activity of a firm or industry in the market badly affects the society than it's private cost, it is called negative externality. Therefore, there is society cost > private cost.
15) d. total fixed cost. Because here the cost is fixed for company which includes rent, permanent labour wage ect. Company face loss or profit by producing output has no impact on fixed cost.
16) a. $1.10
Because average total cost = total cost / quantity = 16.50 / 15 = $1.10
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