Scenario 10-4 the Demand Curve for Fire Extinguishers Slopes Downward and the and the Supply

question 40

Essay

Scenario 10-4
The demand curve for fire extinguishers slopes downward and the supply curve for fire extinguishers slopes upward. The production of the 500^th fire extinguisher entails the following:
• a private cost of $10;
• an external cost of $0;
• a private value of $9;
• an external benefit of $3.
-Refer to Scenario 10-4. Does the production of fire extinguishers convey a positive externality, a negative externality, or neither?

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Definitions:

Government

The organization, or system of organizations, through which a society formulates and enforces public policy, maintains order, and provides collective services.

War

A state of armed conflict between different countries or different groups within a country.

Smith v. Allwright

A landmark 1944 United States Supreme Court decision that prohibited racial discrimination in primary elections.

Henry Luce

An influential American magazine magnate who co-founded and headed Time Inc., which published several major magazines including Time, Life, Fortune, and Sports Illustrated.