2.

Pure public goods O will never be provided at all by the private market. O are prohibited from being provided by the private market, even though it would increase social efficiency if private firms were permitted to provide them. O are oversupplied when the private market is not regulated by the government. O will be underprovided by the private market.Which of the following is an example of a negative consumption externality? O A farm that grows vegetables uses pesticides that seep into the groundwater that nearby residents drink. 0 My neighbors plant a tree in their yard that provides my house with a pleasant amount of shade. Q) My neighbors play loud music at night, keeping me awake later than I'd like. 0 A manufacturing plant that burns coal to power its production lines emits pollution into the air. In a market with no consumption externalities, O social marginal benefit (SMB) and private marginal benefit (PMB) cannot be compared. O the social marginal benefit (SMB) curve is below the private marginal benefit (PMB) curve. O the social marginal benefit (SMB) curve is above the private marginal benefit (PMB) curve. O the social marginal benefit (SMB) curve is the same as the private marginal benefit (PMB) curve.If a production process generates pollution (a negative externalityl, then rms in a competitive market will 0 produce the socially optimal quantity of that good. produce more of the good than is socially optimal. O produce zero output. O produce less of the good than is socially optimal. To reach an economically efficient output level, the size of an excise (i.e., Pigouvian) tax imposed on a firm that generates a negative externality should be equal to O the firm's private marginal cost. O the social marginal cost. the difference between the social marginal cost and the firm's private marginal cost. O the sum of the social marginal cost and the firm's private marginal cost.Governments frequently provide pure public goods such as national defense because 0 people do not value pure public goods like national defense. 0 private rms will earn excess prots if they were to produce pure public goods like national defense. free-rider problems will result in underprovision of pure public goods like national defense in the private market. 0 private provision of pure public goods like national defense would reduce overall social welfare