The Demand Curve and Supply Curve for a Good Are

question 48

Multiple Choice

The demand curve and supply curve for a good are given by Q^D = 100 - 5P and Q^S = 1.25P - 2.5. Suppose the production of this good creates a negative externality, where the external marginal cost is constant at $2. Assuming the government implements the appropriate per-unit tax to achieve the socially optimal outcome, buyers pay a price of $_____.

• A) 16.80
• B) 14.80
• C) 16.00
• D) 14.00

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Definitions:

Passive Diffusion

The process by which molecules move from an area of higher concentration to an area of lower concentration without the input of energy.

Vascular Cylinder

The central part of a plant root, containing the xylem, phloem, and other tissues that transport water and nutrients.

Root Hairs

Thin, hair-like extensions from the root of a plant that increase the surface area for water and nutrient absorption.

Endodermis

The innermost layer of cells in the cortex of plants, regulating the transfer of water and nutrients from the soil.