Assume that the production of a good imposes external costs upon ...

[Lisaclaire]

Assume that the production of a good imposes external costs upon third parties. If the price and quantity of this good is set by supply and demand the price will be too:
 a. high and quantity too low for efficient resource allocation.
  b. low and quantity too low for efficient resource allocation.
  c. low and quantity too high for efficient resource allocation.
  d. high and quantity too high for efficient resource allocation.

Question 2

A cost or benefit of a good imposed on people other than the consumers or producer of a good is called a(n):
 a. public good. b. merit good.
  c. private good. d. externality.

[britb2u]

Answer to Question 1

c

Answer to Question 2

d

[Lisaclaire]

Thanks for the timely response, appreciate it

[mammy1697]

YES! Correct, THANKS for helping me on my review