Author Question: In the case of negative externalities in production, the firm's internal costs: a. exceed the ... (Read 65 times)

shenderson6 · **on:** Jun 30, 2018

In the case of negative externalities in production, the firm's internal costs:
a. exceed the external costs.
b. are less than the external costs.
c. equal the external costs.
d. understate the true cost of producing the product.
e. overstate the true cost of producing the product.

Question 2

Which of the following would be an external cost associated with the manufacture of cigarettes?
a. Price of a pack of cigarettes.
b. Price of leaf tobacco.
c. Cost to the government of the hospital expenses of indigent smokers.
d. Cost to the employer of the higher health insurance premiums due to the hiring of a smoker.
e. Cost to the employer of the extra effort lost due to the increased missed days of work as a result of smoking.