The Following Graph Shows Equilibrium in a Market in the Presence

question 113

Multiple Choice

The following graph shows equilibrium in a market in the presence of an externality. The amount by which the total social cost of producing the private equilibrium level of output exceeds the total social benefit is _____.​ ​
Figure 17.1
​

• A)$3,000
• B)$1,000
• C)$5,000
• D)$1,600
• E)$1,400

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Definitions:

Riegle-Neal Interstate Banking

Legislation passed in the United States in 1994 that allowed bank holding companies to acquire banks in other states, effectively removing barriers to interstate banking.

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Stands for the Federal Deposit Insurance Corporation, a U.S. government agency that provides deposit insurance to depositors in American commercial banks and savings institutions, protecting them against bank failure.

Federal Reserve

The central banking system of the United States, responsible for setting monetary policy, regulating banks, and ensuring financial stability.

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A financial crisis in the 1980s and 1990s involving the insolvency of numerous savings and loan associations in the United States.