A positive externality is shown by a marginal social benefit (MSB) curve that is
A) above and to the right of the demand curve for the good that generates it.
B) below and to the left of the demand curve for the good that generates it.
C) above and to the left of the supply curve for the good that generates it.
D) below and to the right of the supply curve for the good that generates it.
E) positively related to both the supply curve and the demand curve for the good that generates it.
Question 2
The cross-price elasticity between a pair of complementary goods will be
A) positive.
B) negative.
C) zero.
D) positive or zero depending upon the strength of the relationship.
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