Government Intervention in a Particular Industry Is Unnecessary If Each

question 17

Multiple Choice

Government intervention in a particular industry is unnecessary if each of the industry's firms is operating where

• A)there are no positive externalities.
• B)there are no negative externalities.
• C)price is equal to private marginal cost.
• D)marginal social benefit is equal to marginal social cost.
• E)the demand curve is perfectly elastic.

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Definitions:

Shipping Container

A large standard-sized metal box used for transporting goods by sea, land, or air.

Static Budget

A budget based on a fixed set of assumptions and output levels, not adjusting for changes in business activity.

Guest-Days

A metric used in the hospitality industry to measure the number of guests and the days they stay; calculated by multiplying the number of guests by the number of days they stay.

Total Overhead Cost

The sum of all indirect costs associated with manufacturing a product or providing a service, excluding direct labor and direct materials costs.