Answer to Question #52971 in Microeconomics for Yana

Question #52971
MULTIPLE CHOICE 1. An externality occurs when: a. people other than those making the demand and supply decisions share the benefits or the costs of an activity. b. only the people making the demand and supply decisions share the benefits or the costs of an activity. c. private costs equal social costs. d. private costs of production are ignored. 2. When a firm's activities create a negative externality: a. the marginal social cost curve will lie everywhere below the firm's marginal private cost curve. b. the marginal social benefit curve will lie everywhere below the firm's marginal private benefit curve. c. the marginal social cost curve will lie everywhere above the firm's marginal private cost curve. d. the marginal social benefit curve will lie everywhere above the firm's marginal private benefit curve.
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Expert's answer
2015-07-31T00:00:43-0400
a. people other than those making the demand and supply decisions share the benefits or the  costs of an activity.
c. the marginal social cost curve will lie everywhere above the firm's marginal private cost curve.

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