If a Positive Externality Prevails in the Market for Smoke

question 38

Multiple Choice

If a positive externality prevails in the market for smoke detectors, then when the market is in equilibrium,

• A)the marginal social benefit of smoke detectors exceeds the marginal social cost.
• B)the marginal social cost of smoke detectors exceeds the marginal social benefit.
• C)the marginal social cost of smoke detectors is equal to the marginal social benefit.
• D)more than the efficient amount of smoke detectors is sold.

---

Definitions:

Allotropes

Different forms of the same element, with distinct physical and chemical properties, due to different arrangements of atoms or bonds (e.g., graphite and diamond are allotropes of carbon).

Carbon

A chemical element with symbol C and atomic number 6, essential to all known life and the basis for organic chemistry.

Pyrimidine

A nitrogen-containing heterocyclic aromatic compound, similar to benzene and pyridine, but with two nitrogen atoms in the ring.

Aromatic

Refers to organic compounds containing one or more benzene rings or similar ring structures, characterized by their stability and unique chemical properties.