1.In a free market, production that contributes to positive externalities will be:

overproduced.

free.

unavailable.

underproduced.

2.Consider the model of a competitive market.Given this model, if a tax is imposed on sellers who pollute, both the equilbrium price and equilibrium quantity will rise.

True

False

3.The problem with public goods is similar to the problem with positive externalities: the marginal social benefit exceeds any individual's marginal benefit.

True

False

4.Given thediagramof an imperfectly competitive firm, the amount of excess economic profit equals:

$12.

$18.

$33.

$45.

$54

none of the above.

$ Mc Ac 11I1 4 5# 00-0 D 3 4 6 17 Q 650 MR