Use the Figure Below to Answer the Following Questions

question 13

Multiple Choice

Use the figure below to answer the following questions. Figure 15.2.1
-Refer to Figure 15.2.1.The figure shows the marginal private cost curve,the marginal social cost curve and the market demand curve of a mining firm.If the market is unregulated,then

• A)the quantity produced is efficient but price is too low.
• B)the quantity produced is less than the efficient quantity.
• C)the quantity produced is greater than the efficient quantity.
• D)the quantity produced is efficient but the price is too high.
• E)the externality is eliminated.

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Definitions:

Pareto Optimal Allocation

A resource distribution scenario where no individual can be made better off without making at least one individual worse off.

Utility Function

A mathematical representation of how different combinations of goods or services provide levels of satisfaction or utility to an individual.

Initial Endowment

The initial allocation or distribution of resources, goods, or wealth among individuals or entities at the start of an economic experiment or model.

Apples

A type of fruit commonly consumed fresh, cooked, or as juice, recognized for its sweet or tart flavor.