Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

question 82

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 400th gallon of gasoline entails the following:
a private cost of $2.83;
a social cost of $3.12;
a value to consumers of $3.23.
-Refer to Scenario 10-1. Let Q represent the number of gallons of gasoline and let P represent the price of a gallon of gasoline. Which of the following statements is correct?

• A)One point on the social-cost curve is (Q = 400, P = $0.29).
• B)One point on the supply curve is (Q = 400, P = $2.83).
• C)One point on the demand curve is (Q = 400, P = $3.12).
• D)The socially optimal quantity of gasoline is less than 400 gallons.

---

Definitions:

Precautionary Approach

A principle advising that action should be taken to prevent harm when it is uncertain, prioritizing prevention over reaction.

Environmental Challenges

Environmental challenges refer to the diverse issues impacting the natural environment, such as climate change, pollution, deforestation, and loss of biodiversity, which pose threats to ecosystems and human well-being.

UN Global Compact

A United Nations initiative to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation.

Sustainable Practices

Efforts and policies designed to minimize negative environmental impacts while conserving energy and natural resources for future generations.