Suppose the Production of a Good Results in Positive Externalities

question 120

Multiple Choice

Suppose the production of a good results in positive externalities. If output occurs at the intersection of the marginal social benefits curve and the supply curve, then

• A)output will be at the socially optimal level.
• B)the price of the product will be the same as it was when all benefits were not taken into account.
• C)more output will be produced than if all benefits were not taken into account.
• D)a and c
• E)a, b, and c

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Definitions:

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involves informing the appropriate authorities or bodies about illegal or unethical activities within an organization or institution.

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The act of assisting or facilitating another person in the commission of a crime.

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A legal principle allowing confidentiality of communication between accountants and their clients, similar to attorney-client privilege.