FPC1 - Examining Externalities

If the marginal private benefit of attending college for Shelly is $40,000 and the marginal external benefit is $15,00, she will attend college if the cost of attendance is no more than?

$40,000

If the marginal social cost of generating a kilowatt of electricity is .10 and the marginal private cost is .08, what is the marginal external cost?

.02

For a firm, its labor costs are?

A private cost

Which of the following equations is correct?

MSC=MC +MEC

When a person receives a flu vaccination, the _______ is the additional benefit the person receives from getting the shot.

Marginal private benefit

If a government action is designed to achieve efficiency, then the action must have the market produce the amount of output so that the?

Marginal social costs equals the marginal social benefits.

A marginal external costs of a product is equal to?

The cost someone other than the producer incurs when another unit is produced.

A good or service with a positive externality is one which?

The marginal social benefit exceeds the marginal private benefit and there will be underproduction of the good.

If all education in the U.S. were provided by private, tuition charging schools,

Too little education would be consumed.

Externalities

can be either benefits or costs.

For a product with an external cost, the supply curve

is the same as marginal private cost curve