For a Good Whose Production Creates an External Cost,the Efficient

question 28

Multiple Choice

For a good whose production creates an external cost,the efficient quantity of output is

• A) where the market demand curve and the market supply curve intersect.
• B) where the marginal social cost curve and marginal benefit curve intersect.
• C) as low as possible.
• D) zero.
• E) the amount of production so that the marginal social benefit exceeds the marginal social cost by as much as possible.

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Definitions:

Ecosystem Function

The collective biological, geochemical, and physical processes within an ecosystem, which support and regulate the flux of energy and matter.

Top-down Processes

Cognitive processes that are guided by higher-level mental processes, such as experience, expectations, and motivations.

Food Webs

Complex diagrams that show the feeding relationships among species within a community, highlighting who eats whom and the transfer of energy through the ecosystem.

Keystone Species

A species that plays a critical role in maintaining the structure of an ecological community, affecting many other organisms in the ecosystem and helping to determine the types and numbers of various other species in the community.