Table 10-1 the Following Table Shows the Private Value, Private Cost, and Cost

question 148

Multiple Choice

Table 10-1
The following table shows the private value, private cost, and external cost for various quantities of output in a market.
-Refer to Table 10-1. Which of the following statements is correct?

• A)If the external cost per unit of output were $0 instead of $2, then the socially efficient quantity of output would be 4 units.
• B)A tax of $4 per unit would enable this market to move from the equilibrium quantity of output to the socially optimal level of output.
• C)Taking the external cost into account, total surplus declines when the 3rd unit of output is produced and consumed.
• D)The market for flu shots is a market to which the concepts in this table apply very well.

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Definitions:

Third Places

Public spaces, besides home (first place) and work (second place), where people socialize, like cafes or parks.

Leisure

The enjoyment of free time with activities outside of work and daily responsibilities, often for enjoyment, entertainment, and relaxation.

Recreation

Actions taken for fun, relaxation, or happiness during non-working hours.

Ecotourism

Responsible travel to natural areas that conserves the environment and improves the well-being of local people.