Author Question: The marginal social cost and private cost curves for a particular common property resource are ... (Read 36 times)

stevenposner · **on:** Jul 1, 2018

The marginal social cost and private cost curves for a particular common property resource are upward sloping.

What happens to the gap between teh actual quantity and the socially optimal quantity as the demand for the resource becomes more inelastic? A) Gap widens
B) Gap declines
C) Gap does not change
D) We do not have enough information to answer this question

Question 2

When the government imposes a specific tax per unit on a product, changes in consumer surplus are ________ and changes in producer surplus are ________.

A) negative; positive
B) positive; positive
C) negative; negative
D) positive; negative