8. The impact of one person\'s actions on the well-being of a bystander is calle

Question

8. The impact of one person's actions on the well-being of a bystander is called a. an economic dilemma. b. deadweight loss. c. a multi-party problem. d. an externality 9. An externality a. results in an equilibrium that does not maximize the total benefits to society. b. causes demand to exceed supply. c. strengthens the role of the "invisible hand" in the marketplace. d. affects buyers but not sellers. Figure 10-1 Supply P-hace Public Costs) Price 190 1.80 1.70 1.60 1.50 Pivate Costs) 1.35 ". 35 38 42 58 10. Refer to Figure 10-1. This graph represents the tobacco industry. The industry creates positive externalities b. negative externalities. C. no externalities d. no equilibrium in the market. 11. Refer to Figure 10-1. This graph represents the tobacco industry. Without any government intervention, the equilibrium price and quantity are a. $1.90 and 38 units, respectively. b. $1.80 and 35 units, respectively. c. $1.60 and 42 units, respectively. d 1.35 and 58 units, respectively. 12. Refer to Figure 10-1. This graph represents the tobacco industry. The socially optimal price and quantity are a. $1.90 and 38 units, respectively. b. $1.80 and 35 units, respectively. c. $1.60 and 42 units,respectvely. d. $1.35 and 58 units, respectively.

Explanation / Answer

ANSWERS

(8) D

an externality

(9)A

results in an equilibrium that does not maximise total benefit to the society

(10)B

negative externalities

(11)C

$ 1.60 and 42 units respectively

(12)B

$1.80 and 35 units respectively

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