Exhibit 17-1 If Technology Is Fixed, the Discrepancy Between

question 128

Multiple Choice

Exhibit 17-1 If technology is fixed, the discrepancy between the private equilibrium and the efficient level of output in Exhibit 17-1 is best eliminated by

• A)subsidizing the production of the good by $10 per unit
• B)taxing the firm producing the good by $10 per unit
• C)using a quota system to encourage production of at least 160 units of the good
• D)using a quota system to restrict production of the good to no more than 160 units
• E)letting the private market operate freely to determine output at equilibrium

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Definitions:

Stock Market

A public market for buying and selling company stocks and securities, facilitating equity investment and price discovery.

Economic Boom

A period of significant economic growth, high employment, and often inflation within an economy.

Unemployment Rate

The extent of individuals within the labor force who are without work but are actively job hunting.

President Eisenhower

Dwight D. Eisenhower, the 34th President of the United States, who served from 1953 to 1961, previously a five-star Army general during World War II.