When Marginal Private Benefit Is Equal to Marginal Private Cost

question 124

Multiple Choice

When marginal private benefit is equal to marginal private cost,

• A)the activity in question generates no negative externality.
• B)all negative externalities have been internalized.
• C)all positive externalities have been internalized.
• D)the socially optimal level of output is less than the market output.

---

Definitions:

High Tariffs

Taxes imposed on imported goods to protect domestic industries from foreign competition by making imported goods more expensive.

Second Industrial Revolution

A period of rapid industrial growth and technological advancement during the late 19th and early 20th centuries, often associated with new innovations in steel production, electricity, and transportation.

Mining

The extraction of valuable minerals or other geological materials from the earth.

Railroad Industries

A sector centered around the development, maintenance, and operation of railways, which played a critical role in economic growth and the expansion of trade and transport in the 19th and early 20th centuries.