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With the help of the graph, it is observed that the marginal private benefit of the good is $95 and, due to a positive externality, the marginal benefit to society is $125. In this case, the marginal external benefit created by the positive externality is $ In the graph, represents a deadweight loss. The deadweight loss the foregone benefit to society of the externality. Positive externality will occur when, A. the marginal social benefit is equal to marginal private benefit OB. the marginal social benefit is equal to deadweight loss OC. the marginal social benefit is greater than the marginal cost to produce at the market equilibrium OD. the marginal social benefit is equal to marginal social cost to produce at the market equilibrium Which of the following statements is true regarding pecuniary externalities? O A. It is a branch of the negative externality. B. It causes market inefficiencies. C. It leads to wrong equilibrium quantities. D. It affects other people only through market price. Prices (in dollars) Graph 150 95 90- 60- ན་་་རྩ་ཎྜ ་ ༔་༔ ་ ༔ ་་ 140- 130- 120- 110- 100- Qmarket Qoptimal Quantity MSB

With the help of the graph, it is observed that the marginal private benefit of the good is $95 and, due to a positive externality, the marginal benefit to society is $125. In this case, the marginal external benefit created by the positive externality is $ In the graph, represents a deadweight loss. The deadweight loss the foregone benefit to society of the externality. Positive externality will occur when, A. the marginal social benefit is equal to marginal private benefit OB. the marginal social benefit is equal to deadweight loss OC. the marginal social benefit is greater than the marginal cost to produce at the market equilibrium OD. the marginal social benefit is equal to marginal social cost to produce at the market equilibrium Which of the following statements is true regarding pecuniary externalities? O A. It is a branch of the negative externality. B. It causes market inefficiencies. C. It leads to wrong equilibrium quantities. D. It affects other people only through market price. Prices (in dollars) Graph 150 95 90- 60- ན་་་རྩ་ཎྜ ་ ༔་༔ ་ ༔ ་་ 140- 130- 120- 110- 100- Qmarket Qoptimal Quantity MSB

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 2PA
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With the help of the graph, it is observed that the marginal private benefit of the good is $95 and, due to a positive externality, the marginal benefit to society is $125. In this case, the marginal external benefit created by the positive externality is $ In the graph, represents a deadweight loss. The deadweight loss the foregone benefit to society of the externality. Positive externality will occur when OA. the marginal social benefit is equal to marginal private benefit B. the marginal social benefit is equal to deadweight loss OC. the marginal social benefit is greater than the marginal cost to produce at the market equilibrium OD. the marginal social benefit is equal to marginal social cost to produce at the market equilibrium Which of the following statements is true regarding pecuniary externalities? A. It is a branch of the negative externality. B. It causes market inefficiencies. C. It leads to wrong equilibrium quantities. D. It affects other people only through market price. Prices (in dollars) Graph 150- 140- 130- 90- ཞ་་་་་་ཎྜ་་་་་་་་ 125 120- 110- 100- 60- MSB 50- Qmarket Qoptimal Quantity
Transcribed Image Text:With the help of the graph, it is observed that the marginal private benefit of the good is $95 and, due to a positive externality, the marginal benefit to society is $125. In this case, the marginal external benefit created by the positive externality is $ In the graph, represents a deadweight loss. The deadweight loss the foregone benefit to society of the externality. Positive externality will occur when OA. the marginal social benefit is equal to marginal private benefit B. the marginal social benefit is equal to deadweight loss OC. the marginal social benefit is greater than the marginal cost to produce at the market equilibrium OD. the marginal social benefit is equal to marginal social cost to produce at the market equilibrium Which of the following statements is true regarding pecuniary externalities? A. It is a branch of the negative externality. B. It causes market inefficiencies. C. It leads to wrong equilibrium quantities. D. It affects other people only through market price. Prices (in dollars) Graph 150- 140- 130- 90- ཞ་་་་་་ཎྜ་་་་་་་་ 125 120- 110- 100- 60- MSB 50- Qmarket Qoptimal Quantity
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