[Solved] Figure 99 Shows the Demand and Supply of a Product in in a Competitive

If the price of a product is less than its marginal social costs,then: A)Society would prefer more of this product being produced. B)Society would prefer less of this product being produced. C)External costs must be zero. D)Short-run average costs must be at minimum.

What does the long-run equilibrium of a perfectly competitive market suggest? A)That the price is equal to the lowest SRAC but not necessarily the lowest LRAC. B)That the price is equal to the lowest LRAC but not necessarily the lowest SRAC. C)That the price is equal to both the lowest SRAC and the lowest LRAC. D)That price cannot equal marginal cost.

All of the following,except one,are benefits of perfectly competitive markets.Which is the exception? A)Competitive markets promote personal economic freedom. B)Competitive markets eliminate externalities. C)Ignoring externalities,competitive markets are productively efficient. D)Competitive markets are costless to implement. E)Ignoring externalities,competitive markets are allocatively efficient.

Which form of pollution control would one expect environmental groups to favour the most? A)Legislative controls,because of the built-in incentive firms have to reduce pollution below the required minimum. B)A pollution tax,because the producer pays all of the tax and the consumer none. C)The pollution tax,because the consumer pays all of the tax and the producer none. D)The marketing of pollution permits because the environmental group has the option of directly reducing pollution by buying permits and not using them.

Figure 9.9 shows the demand and supply of a product in a competitive market. -Refer to Figure 9.9 to answer the question.Suppose this graph represents a polluting industry and that the government wishes to decrease its output by 10 units.Which of the following will produce this result? A)Imposing an excise tax of $2. B)Imposing an excise tax of $1. C)Granting a subsidy of $2 to producers. D)Granting a subsidy of $1 to producers. E)Granting a subsidy of $2 to consumers.

Figure 9.9 shows the demand and supply of a product in a competitive market. -Refer to Figure 9.9 to answer the question.Suppose that this graph represents an industry with big external benefits and that the government wishes to increase its output by 10 units and raise its price.Which of the following will produce this result? A)Imposing an excise tax of $2. B)Imposing an excise tax of $1. C)Granting a subsidy of $2 to producers. D)Granting a subsidy of $1 to producers. E)Granting a subsidy of $2 to consumers.

-Refer to Figure 9.10 to answer this question.Which of the following statements is correct regarding an unregulated competitive market? A)Its price of P₁ would be lower than a price that included all externalities. B)Its price of P₁ would be higher than a price that included all externalities. C)Its price of P₂ would be higher than a price that included all externalities. D)Its price of P₃ would be lower than a price that included all externalities. E)Its price of P₄ would be lower than a price that included all externalities.

-Refer to Figure 9.10 to answer this question.Which of the following statements is true if external costs are recognized but external benefits are not? A)The price would be P₁. B)The price would be P₂. C)The price would be P₃. D)The price would be P₄.

-Refer to Figure 9.10 to answer this question.Compared with the ideal quantity,which of the following statements is correct regarding an unregulated competitive market? A)It would be overproducing at quantity Q₁. B)It would be under producing at quantity Q₂. C)It would be overproducing at quantity Q₂. D)It would be overproducing at quantity Q₃. E)It would be under producing at quantity Q₄.

09-05 Explain how governments try to encourage production of goods and services;such as education;that carry external benefits. 09-18 Providing Subsidies Added Y axis line. -The diagram above represents an industry.Assuming that the market structure for this industry is perfect competition,the producer surplus is shown by the area: A)BEC B)AEC C)AFC D)BED