Exhibit 31-5 -Refer to Exhibit 31-5.If a Positive Externality Exists,then Curve 1

question 38

Multiple Choice

Exhibit 31-5

-Refer to Exhibit 31-5.If a positive externality exists,then curve 1 represents the __________,curve 2 represents the __________,curve 3 represents the __________ and Q₁ represents the __________.

• A) marginal private cost curve; demand curve; marginal social benefit curve; market output
• B) demand curve; marginal social benefit curve; supply curve; market output
• C) marginal social benefit curve; demand curve; marginal private cost curve; socially optimal output
• D) demand curve; marginal social benefit curve; supply curve; socially optimal output
• E) marginal social benefit curve; supply curve; marginal private cost curve; market output

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded, usually depicted as downward sloping.

Slopes Downward

Used to describe a graph line that indicates a decrease in one variable as another variable increases, often related to demand curves in economics.

Nondiscriminating Monopolist

A nondiscriminating monopolist refers to a monopolist who charges the same price for each unit of the product sold to all consumers, unlike price discrimination where different prices are charged to different consumers.

Demand Curve

A graph demonstrating how the quantity of a good or service demanded varies with its price, typically downward sloping.