When the Production of a Good Has an External Cost

question 109

Multiple Choice

When the production of a good has an external cost, the

• A) marginal social cost curve lies below the marginal private cost curve.
• B) marginal social benefit curve lies above the marginal private benefit curve.
• C) equilibrium quantity in an unregulated, competitive market has a marginal social cost greater than the marginal social benefit.
• D) equilibrium quantity in an unregulated, competitive market has a marginal social cost less than the marginal social benefit.

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Definitions:

Plateau Phase

In sexual response, the stage characterized by intense pleasure just before orgasm, where sexual excitement is maintained at a high but stable level.

Excitement Phase

The initial phase of the sexual response cycle, characterized by increased arousal and physiological changes in preparation for sexual activity.

Seminal Fluid

A fluid that is part of semen, produced by several glands in the male reproductive system, and serves to transport and nourish sperm.

Contractions

In physiology, the process of muscle fibers shortening and generating force; in linguistics, the shortening of words by omitting sounds or letters.