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The Presence of an External Benefit That Is Not Corrected

Question 15
Multiple Choice

The presence of an external benefit that is not corrected results in: A) additional total economic surplus. B) deadweight loss. C) a larger economic pie to be distributed among everyone. D) taxation.

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Q 16
An external benefit implies that private markets will provide ____ of the good (relative to the social optimum),and an external cost implies that private markets will provide _____ of the good. A) too much;too much B) too little;too little C) too much;too little D) too little;too much
Q 17
Private incentives in markets with external benefits lead to _____;private incentives in markets with external costs lead to _____. A) maximum total economic surplus;deadweight loss B) deadweight loss;deadweight loss C) excess total economic surplus;efficiency D) excess total economic surplus;deadweight loss
Q 18
Suppose that a vaccine is developed for a highly contagious strain of flu.The likelihood that anyone will get this flu decreases as more people receive the vaccine.One of the demand curves in the diagram reflects private benefits and the other reflects social benefits. Refer to the figure above.Private incentives will lead to _____ people receiving the vaccine at a cost of _____. A) 75;$80 B) 75;$50 C) 50;$60 D) 50;$90
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