When a Positive Externality Is Present in a Market, Total

question 130

Multiple Choice

When a positive externality is present in a market, total surplus will _______ if buyers _______.

• A)increase; receive a subsidy
• B)decrease; receive a subsidy
• C)increase; only consider private benefits
• D)increase; only consider social costs

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Definitions:

Obligation

A legal or moral duty to complete certain actions or to make payments to others.

Specified Price

Specified Price is the predefined price at which an investor agrees to buy or sell a security or commodity in a futures contract.

Municipal Bond Yields

The return investors can expect to earn if they hold a municipal bond until maturity, often tax-exempt.

Corporate Bond Yields

The interest income received from holding corporate bonds, expressed as a percentage of the bond's price.