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:

Federal Outlays

Government spending or expenditures, including the money spent on defense, education, social security, and other public services.

Federal Budget

A plan for federal government outlays and revenues for a specified period, usually a year.

Fiscal Policy

Government strategies to influence a country's economy through public spending and taxation decisions.

Monetary Policy

The process by which the central bank of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.