Consider an Industry Producing Good X

question 93

Multiple Choice

Consider an industry producing good X.The quantity of good X produced in a competitive free market will be greater than the socially optimal level if

• A)the production of good X generates a positive externality.
• B)good X is a public good.
• C)the consumption of good X generates a positive externality.
• D)the production of good X generates a negative externality.
• E)the government has imposed a tax on the production of good X.

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Definitions:

Income-Maintenance Programs

Government programs designed to provide financial assistance to individuals or households to ensure a minimum level of income.

Aggregate Spending

The total amount of spending in an economy, including consumption, investment, government purchases, and net exports.

Medicare

In the United States, a national health coverage scheme available to individuals over 65, younger persons with specific disabilities, and those suffering from End-Stage Renal Disease.

Statistical Discrimination

A situation where individuals are judged based on the average characteristics of their group instead of their own specific attributes or merits.