If There Are External Benefits or Positive Externalities Associated with Consumption

question 56

Multiple Choice

If there are external benefits or positive externalities associated with consumption and production of a product, it can be said that the:

• A)government should consider placing a special tax on producers.
• B)government should consider prohibiting the production of the commodity.
• C)supply curve for the product lies too far to the right to provide an efficient allocation of resources.
• D)demand curve understates the total benefit from the product and resources are under-allocated to its production.

Recognize the importance of using precise and clear language in surveys and research questions.

Understand the role of document design in the efficiency of questionnaires and surveys.

Acknowledge the significance of beginning a search using keywords.

Understand the importance of document pre-reading in the context of research note-taking.

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Definitions:

Total-Cost Curve

A graph that shows the relationship between the total cost incurred by a firm and the level of output produced.

Production Function

An equation or graph showing the maximum output that can be produced with a given set of inputs, such as labor and capital, under existing technology.

Marginal Product

Enhanced output originating from the inclusion of an additional input unit.

Total-Cost Curve

A graphical representation of the total costs associated with producing varying quantities of output, showing how costs change with changes in output.