If a Firm Produces a Good and Its Consumption Generates

question 120

Multiple Choice

If a firm produces a good and its consumption generates external benefits,then at the competitive market equilibrium

• A)the government could subsidize the production of this good to improve efficiency.
• B)the marginal private benefit is greater than the marginal cost of producing the last unit.
• C)the output would be more than the socially optimal amount.
• D)the firm will not produce an additional amount if it can internalize the external benefits.
• E)the marginal social benefit is less than the marginal cost of producing the last unit.

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Definitions:

Knowledge Test Again

An assessment or examination designed to measure the understanding or proficiency in a specific area or subject, conducted twice to compare results.

Nonequivalent Control Group Design

An experimental design in which the participants are not randomly assigned to groups, potentially endangering the internal validity due to selection bias.

Selection Differences

Variations in the characteristics of participants in different groups of an experiment due to non-random assignment.

Serious Flaw

pertains to a significant error or shortcoming in design, methodology, or interpretation that can undermine the reliability, validity, or integrity of a research study or argument.