Suppose the Socially Optimal Output Is 134 Units of a Good

question 183

Multiple Choice

Suppose the socially optimal output is 134 units of a good and the market output is 95 units of the good. A possible reason the market produces "too little" is that

• A)marginal private benefits are less than marginal social benefits.
• B)marginal private benefits are greater than marginal private costs.
• C)marginal private benefits are greater than marginal social benefits.
• D)marginal private costs are greater than marginal private benefits.
• E)b and c

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Definitions:

Myopic

Nearsightedness; a condition in which close objects appear clearly but distant ones don't.

Nearsighted

A vision condition, also known as myopia, where close objects appear clear but distant ones are blurry.

Stimulus

A change in the environment that elicits a response from an organism or a system.

Alteration

A change or modification, usually used to refer to a small change in structure, form, or quality.