17. No resources beyond that optimum point level should be allocated to production. True False 6. When the Marginal Social Benefit = Marginal Social Cost, Price decreases and quantity increases. True False 14. Resources are NOT efficiently allocated to any product when the MB and MC are equal. True False * *

17. No resources beyond that optimum point level should be allocated to production. True False 6. When the Marginal Social Benefit = Marginal Social Cost, Price decreases and quantity increases. True False 14. Resources are NOT efficiently allocated to any product when the MB and MC are equal. True False * *

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 8SCQ: The chapter defines private enterprise as a characteristic of market-oriented economies. What would...

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The depletion of the ozone layer is attributed to the emission of Chlorofluorocarbons (CFCs). Before 1990, the use of coolants in refrigerators such as Freon released a significant amount of CFCs. Given the above scenario, is the equilibrium level of refrigerators produced prior to 1990 in the market “too much” or “too little” compared to the social optimum? Explain why this occurs. Support your answer by drawing the private and social, marginal cost and marginal benefit curves for refrigerators. Identify the deadweight loss if any exists. Identify a regulation that the government can use to achieve the socially optimal level of refrigerators. Explain how this regulation works. Explain how the Coase theorem could hypothetically work to achieve the optimal level of CFCs emissions in this context. Enumerate at least one major drawback that hinders the creation of a market for CFCs without any third party regulators in the real world. Assume that the marginal savings for refrigerator…
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