If the Market Equilibrium Quantity Is Less Than the Socially

question 18

Multiple Choice

If the market equilibrium quantity is less than the socially optimal quantity, one can infer that:

• A)the private supply curve for the activity is below the socially optimal supply curve.
• B)the private demand curve for the activity is above the socially optimal demand.
• C)there is a positive externality associated with this good.
• D)there is a negative externality associated with this good.

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Definitions:

Schedule B

A section of IRS tax forms for reporting interest and dividend income.

Interest Income

Income earned from various forms of investments that pay interest, such as savings accounts, CDs, and government bonds, subject to income tax.

Dividend Income

Income received from owning shares in a corporation, typically paid out from the corporation's profits.

Economic Benefit

The advantage or gain received by individuals or businesses, often used in the context of employee compensation, taxation, and public policy.