This topic contains a solution. Click here to go to the answer

Author Question: Why does the presence of negative externalities in the production of a good lead to an ... (Read 26 times)

mydiamond

  • Hero Member
  • *****
  • Posts: 804
Why does the presence of negative externalities in the production of a good lead to an overproduction of the good?
 
  What will be an ideal response?

Question 2

The above table shows production combinations on a country's production possibilities frontier. Which of the following points signifies efficient production?
 
  A) 0 units of good X and 40 units of good Y
  B) 3 units of good X and 25 units of good Y
  C) 10 units of good X and 16 units of good Y
  D) 12 units of good X and 1 unit of good Y



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

beccamahon

  • Sr. Member
  • ****
  • Posts: 338
Answer to Question 1

If the production of a good generates negative externalities, the marginal social cost of producing the good exceeds the marginal private cost of producing the good. However, the producers of the good do not take this external cost into account and continue producing as long as the marginal private benefit from production exceeds the marginal private cost. This leads to an overproduction of the good.

Answer to Question 2

A




mydiamond

  • Member
  • Posts: 804
Reply 2 on: Jun 29, 2018
:D TYSM


miss_1456@hotmail.com

  • Member
  • Posts: 289
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Historic treatments for rheumatoid arthritis have included gold salts, acupuncture, a diet consisting of apples or rhubarb, nutmeg, nettles, bee venom, bracelets made of copper, prayer, rest, tooth extractions, fasting, honey, vitamins, insulin, snow collected on Christmas, magnets, and electric convulsion therapy.

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

More than 50% of American adults have oral herpes, which is commonly known as "cold sores" or "fever blisters." The herpes virus can be active on the skin surface without showing any signs or causing any symptoms.

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

For a complete list of videos, visit our video library