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When an Externality Is Present in a Market,and Correcting It

Question 36
Multiple Choice

When an externality is present in a market,and correcting it increases the efficiency of the market,we can conclude it is a: A) negative externality. B) positive externality. C) network externality. D) either a negative or a positive externality.

Related questions
Q 37
The net increase to total surplus when a negative externality is corrected or eliminated is due to: A) the transfer of surplus from those affected by the externality to the consumer. B) the reduced number of transactions in the market. C) the transfer of surplus from consumer or producer to those affected by the externality. D) None of these statements is true.
Q 38
When a negative externality is present in a market,the quantity consumed: A) is always less than the socially optimal quantity. B) is more than the socially optimal quantity. C) is the same as the socially optimal quantity. D) is often less than the socially optimal quantity.
Q 39
When positive externalities are present,it means that: A) individuals don't take into account all the benefits associated with their market choice. B) society bears part of the cost borne of private transactions. C) individuals consume more than the social optimum. D) All of these statements are true.
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