Which of the following statements is false ?
A)If a negative externality exists, the market output is greater than the socially optimal output.
B)If a positive externality exists, the market output is less than the socially optimal output.
C)If there are no external costs or benefits, then it follows that marginal private costs equal marginal social costs and marginal private benefits equal marginal social benefits.
D)When a positive externality exists, marginal social benefits are greater than marginal private benefits.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is false ?
A)If a negative externality exists, the market output is greater than the socially optimal output.
B)If a positive externality exists, the market output is less than the socially optimal output.
C)If there are no external costs or benefits, then it follows that marginal private costs equal marginal social costs and marginal private benefits equal marginal social benefits.
D)When a positive externality exists, marginal social benefits are greater than marginal private benefits.

Which of the Following Statements Is False