If positive externalities are present in a free market, ________ ...

[sjones]

If positive externalities are present in a free market, ________ at any output level.
 
  A) the marginal cost of production equals the average cost of production
  B) the marginal social cost of production exceeds the marginal private cost
  C) the marginal private benefit from production equals marginal social benefit
  D) the marginal social benefit of production exceeds marginal private benefit

Question 2

Real GDP can increase either because the quantity of labor increases or because labor productivity increases. What is the effect on the standard of living if real GDP increases because
 
  a. the quantity of labor increases?
  b. labor productivity increases?

[maaaaaaaaaa]

Answer to Question 1

D

Answer to Question 2

a. An increase in real GDP because the quantity of labor increases has no effect on the standard of living.
b. An increase in real GDP because labor productivity increases boosts the nation's standard of living.