Answer:
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Explanation:
Explanation:
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Answer:
c. marginal benefit is less than the marginal cost of the good.
Explanation:
Allocation of resources is important in every nation or society because, human wants are unlimited whereas the resources meant to satisfy these wants are in short supply. Therefore, only the most important needs are satisfied before the less important needs. Marginal benefit is the maximum sum of money that consumers are willing to pay for an additional good or service. Marginal cost is the difference in cost when a new or additional unit of goods is produced.
Nations would allocate less to the production of a good when the maximum price consumers are willing to pay for an added unit of that good becomes less than changes in cost when a unit of that good is produced. Marginal benefit reduces when consumption of the good has increased to a reasonable extent. The consumers then lose interest in paying more for that good.
Answer:
3
Explanation:
Based on your answer to questions 1 and 2, set three goals: one short-term, one mid-term, and one long-term.
Answer:
If consumption of a good gives rise to a negative externality, it can be internalized by subsidizing the purchase of the good.
Explanation:
The effect of a market exchange on a third party who is outside or “external” to the exchange is called an externality or spill over.
Negative externality are negative spill over effects of a transaction, a situation where a third party, outside the transaction, suffers from a market transaction by others
.
Internalizing the externality means <u>shifting the burden, or costs, from a negative externality</u>, such as pollution or traffic congestion, from outside to inside (external to internal). This can be done through taxes, property rights, tolls, and government subsidies.
A negative externality exists is the cost of production exceeds private costs
Hence, such negative externality can be internalized through subsidy by the government
