If the Production of a Good Generates a Positive Externality

question 64

Multiple Choice

If the production of a good generates a positive externality, then:

• A)production of the good is harmful.
• B)there will be deadweight loss at the market equilibrium quantity.
• C)total economic surplus will be maximized at the market equilibrium quantity.
• D)the government should tax producers of the good.

---

Definitions:

Warranty Cases

Legal disputes that arise when there is a breach of express or implied warranties, guaranteeing the condition or quality of a product or service.

Product Defect

A flaw or deficiency in a product that makes it unsafe or unsuitable for its intended use.

Implied Warranty

A legal term for a guarantee that the goods or services sold meet certain quality standards, even though not explicitly stated.

Common Carrier

An entity that provides transportation services to the general public under license or authority provided by a regulatory body.