Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

question 112

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 400th gallon of gasoline entails the following:
a private cost of $2.83;
a social cost of $3.12;
a value to consumers of $3.23.
-Refer to Scenario 10-1. From the given information, it is apparent that

• A)the production of gasoline involves a negative externality, so the market will produce a smaller quantity of gasoline than is socially desirable.
• B)the production of gasoline involves a negative externality, so the market will produce a larger quantity of gasoline than is socially desirable.
• C)the production of gasoline involves a positive externality, so the market will produce a smaller quantity of gasoline than is socially desirable.
• D)the production of gasoline involves a positive externality, so the market will produce a larger quantity of gasoline than is socially desirable.

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Definitions:

Communication

The process of transferring information, meanings, and understanding from one entity or group to another through the use of mutually understood signs and semiotic rules.

Schizophrenia

A long-term, serious mental illness marked by altered thoughts, feelings, communication, self-identity, and actions.

Psychosis

A mental disorder characterized by a disconnection from reality, which may involve delusions, hallucinations, incoherent speech, and disorganized behavior.

Schizophrenogenic Mother

A type of mother—supposedly cold, domineering, and uninterested in the needs of her children—who was once thought to cause schizophrenia in her child.