In the Following Graph, MPC and MSC Represent the Marginal

question 4

Multiple Choice

In the following graph, MPC and MSC represent the marginal private cost and marginal social cost of producing a good respectively. QD represents the demand for the good. Refer to the graph to answer the question. Which of the following statements is true?

• A) The MPC of production is greater than the MSC of producing the good.
• B) The quantity of the good produced in the market will be higher than the socially optimal
• C) For the market to produce the socially optimal level of output, the government should provide a subsidy.
• D) There is a positive externality associated with the production and consumption of this

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Definitions:

Mean

The average of a set of numbers, calculated by adding them together and dividing by the number of values.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values from the mean.

ACT Type Score

A numerical measurement that represents a student's achievement on the ACT test, which is commonly used for college admissions in the United States.

Normal Curve

A bell-shaped curve that represents the distribution of many types of data where most occurrences take place around the average, and fewer instances occur as you move away from the center.