Positive Production and Consumption externalities: True or False
1.) These are external benefits created by producers_____
Explanation:
2.) An example of a positive production externality would be
vaccination _____
Explanation:
3.) If the MSC curve lies above the MPC curve there is a ‘negative cost’
and positive externalities of production are present _____
Explanation:
4.) The optimum amount of production is where MSC = MSB_____
Explanation:
5.) Fig 5.9 shows the under allocation of resources to the production
of a good or service. _____
Explanation:
6.) Fig 5.9 would be true of an industry such as the R and D involved
in the space program _____
Explanation:
7.) Training is not an example of a positive production
externality_____
Explanation:
8.) The under allocation of resources to a good with a positive
production externality leads to a welfare gain_____
Explanation:
9.) Ways of correcting positive production externalities include direct
government provision and subsidies_____
Explanation:
10.) The optimum level of consumption of goods is where the MSB
=MSC_____
Explanation:
11.) When there is a positive consumption externality the free market
under allocates resources to the production of the good_____
Explanation:
12.) The difference between MSB and MSC is the amount of output
that is under produced for positive consumption externality_____
Explanation:
13.) Health and Education are examples of merit goods_____
Explanation:
14.) Merit goods may not be provided by the market because of low
levels of income and poverty and consumer ignorance_____
Explanation:
15.) The best way to correct positive consumption externalities are
through legislation, advertising and direct government
provision_____
Explanation:
16.) Too much information is likely to make it impossible to calculate
precisely the amount of government provision required when there
is under allocation of a good _____
Explanation: