Suppose a good has an external benefit and no external cost. When ...

[MGLQZ]

Suppose a good has an external benefit and no external cost. When a competitive, unregulated market is at its equilibrium, then the
 
  A) marginal private benefit is less than the marginal social benefit.
  B) marginal private benefit is greater than the marginal social benefit.
  C) marginal private cost is less than the marginal social cost.
  D) marginal private cost is greater than the marginal social cost.

Question 2

A technological change that raises the value of marginal product of capital ________ the rental rate of capital because the ________.
 
  A) raises; supply curve of capital shifts leftward
  B) lowers; supply curve of capital shifts rightward
  C) raises; demand curve for capital shifts rightward
  D) lowers; demand curve for capital shifts leftward

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Answer to Question 1

A

Answer to Question 2

C

[MGLQZ]

Excellent

[ktidd]

TYSM