Which of the following represents the true economic cost of production when firms produce goods that cause negative externalities? Group of answer choices the social cost of production the explicit cost of production the private cost of production the external cost of production Flag question: Question 2 Question 20.5 pts Which of the following is NOT an example of a negative externality? Group of answer choices pollution playing a stereo loudly in a crowded park rush hour traffic vaccination against a disease Flag question: Question 3 Question 30.5 pts The Messy Company produces goods that impose costs on society at large. If the producers at Messy Company fail to take external costs into account Group of answer choices the demand curve will be too high (i.e., above the full social benefits). the demand curve will be too low (i.e., below the full social benefits). the supply curve will be too low (i.e., below the full social costs). the supply curve will be too high (i.e., above the full social costs). Flag question: Question 4 Question 40.5 pts If production of a good results in negative external costs, then Group of answer choices the market price is below the socially efficient price that reflects the external costs. the market price is above the socially efficient price that reflects the external costs. the market quantity is too low from society's point of view. market forces will always correct the problem. Flag question: Question 5 Question 50.5 pts Medical research that results in a cure for a serious disease produces positive externalities. What is the impact of this positive externality on economic efficiency? Group of answer choices A deadweight loss occurs because at the market equilibrium the marginal social cost equals the marginal social benefit. At the market equilibrium, more than the economically efficient quantity of medical research is produced. At the market equilibrium, less than the economically efficient quantity of medical research is produced. A deadweight loss occurs because at the market equilibrium the marginal social cost of medical research is greater than the marginal social benefit. Flag question: Question 6 Question 60.5 pts Which of the following is not a cause of market failure? Group of answer choices difficult to enforce property rights hard to define property rights clear and well-defined property rights incomplete property rights Flag question: Question 7 Question 70.5 pts Government can correct for negative externalities by Group of answer choices decreasing taxes. increasing taxes or regulation. decreasing the costs to those responsible for the externality. allowing the market system to correct the problem. Flag question: Question 8 Question 80.5 pts The Coase theorem states that Group of answer choices a free-market equilibrium is the best solution to address externalities. if transactions costs are low, private bargaining can result in an efficient solution to the problem of externalities. government intervention is always needed if externalities are present. assigning property rights is the only thing the government should do in a market economy. Flag question: Question 9 Question 90.5 pts It is difficult to provide the efficient quantity of a public good since efficiency would require that the government Group of answer choices use inefficient private markets to provide public goods to society. know everyone in society's willingness to pay. tax society in order to provide public goods. put up with free-riders. Flag question: Question 10 Question 100.5 pts A tragedy of the commons occurs when a resource is Group of answer choices rival and excludable. non-rival and excludable. rival and non-excludable. non-rival and non-excludable