Use the Table Below to Answer the Following Questions

question 10

Multiple Choice

Use the table below to answer the following questions.
Table 16.2.1

-Refer to Table 16.2.1. Given in the table are the marginal private cost and the marginal social cost of the production of chemical fertilizer and the marginal social benefit from the consumption of fertilizer. Under these circumstances,

• A)there are positive externalities in this market.
• B)there are negative externalities in this market, equal to $10 per unit.
• C)there are no externalities in this market.
• D)not enough information is provided to determine whether or not there are externalities.
• E)there are negative externalities in this market, equal to $20 per unit.

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Definitions:

Marginal Revenue Product

The extra income produced by using an additional unit of a resource, like labor or capital.

Purely Competitive

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product, leading to price taking by firms.

Marginal Product

The additional output resulting from the use of one more unit of a factor of production.

Marginal Product

The marginal product is the additional output produced as a result of adding one more unit of a specific input, keeping other inputs constant.