A Positive Externality Will Cause a Market To

question 95

Multiple Choice

A positive externality will cause a market to:

• A)produce more than the efficient equilibrium output level.
• B)produce less than the efficient equilibrium output level.
• C)produce the efficient equilibrium output level.
• D)charge the socially optimal price.
• E)charge a price above the socially optimal price.

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Definitions:

Utility

The satisfaction or benefit derived from consuming goods or services.

Consumer Wants

Desires or needs that individuals seek to satisfy through the purchase of goods or services.

Total Utility

The overall satisfaction or value a consumer receives from consuming a given quantity of a good or service.

Marginal Utility

The supplementary enjoyment or value a consumer experiences from the purchase of an additional unit of a product or service.