Suppose the Production of Roses Generates a Positive Externality in That

question 108

Multiple Choice

Suppose the production of roses generates a positive externality in that travelers enjoy the scenic rural vistas.Then the market price of roses:

• A)is less than the marginal social benefit of roses.
• B)is more than the marginal social benefit of roses.
• C)equals the marginal social benefit of roses.
• D)may be more than, less than, or equal to the marginal social benefit of roses.

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Definitions:

Eminent Domain

The right of a government to expropriate private property for public use, with compensation to the owner.

Private Citizen

An individual who does not hold any official or public position and is acting in their personal capacity.

Exclusive Right

A legal provision granting someone the sole authority to perform a particular activity or use a specific resource.

Broker

An individual or firm that acts as an intermediary between buyers and sellers to facilitate transactions, typically in exchange for a commission or fee.