12. The classic example of a detrimental externality is a. education. b. polluti
ID: 1213864 • Letter: 1
Question
12. The classic example of a detrimental externality is
a.
education.
b.
pollution.
c.
discovery of an AIDS vaccine.
d.
Mrs. Lewis' prize-winning rose garden.
Figure 15-1
____ 13. Figure 15-1 describes conditions in the monopolized weezil industry. In the absence of government intervention, the monopolist will produce an output equal to
a.
W.
b.
X.
c.
Y.
d.
Z.
____ 14. Figure 15-1 describes conditions in the monopolized weezil industry. If the government replaces the monopolist with perfectly competitive firms and forces these firms to take account of all the costs and benefits they impose on society, the industry will produce an output equal to
a.
W.
b.
X.
c.
Y.
d.
Z.
____ 15. In the case of a beneficial externality
a.
marginal private cost is below marginal social cost.
b.
marginal social cost is above marginal private cost.
c.
marginal social cost and marginal private cost are equal.
d.
the free market price is below the socially efficient price.
a.
education.
b.
pollution.
c.
discovery of an AIDS vaccine.
d.
Mrs. Lewis' prize-winning rose garden.
MSC MPC MRExplanation / Answer
12. Answer-Pollution
We know that the classical example of Detrimental externality is Air or Water pollution caused by an industrial factories. It is also called the negative externality.
13. Answer- B- X
Here the monopolist will produce the output as X.
14. Answer-C-Y
Here the industry will produce the output as Y.
15. Answer- B-Marginal social cost is above marginal private cost
We know that the beneficial externality means that When an individual or firm making decision does not recieve the full benefits of the decision.
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