1. Suppose the price of product X is reduced from $16.00 to $12.00 and, as a result, the quantity of X demanded increases from 300 to 450. Using the midpoint method, the price elasticity of demand for X in the given price range is: a. 1.4 b. 1.09 c. 0.7 d. 0.4 2. When a production externality has a harmful effect on a bystander at the market equilibrium: a. the social cost of production is lower than the private cost b. the private benefit from consumption is greater than the social cost of production c. society is likely to benefit from production taxes d. none of the above is true 3. Suppose people plant flowering trees near their homes to encourage rare native birds to feed. If people believe that ar increase in native bird populations is valuable, people who plant these trees: a. generate a negative production externality for their neighbours b. generate a positive production externality for their neighbours c. generate a negative consumption externality for their neighbours d. generate a positive consumption externality for their neighbours
1. Suppose the
a. 1.4
b. 1.09
c. 0.7
d. 0.4
2. When a production externality has a harmful effect on a bystander at the
a. the
b. the private benefit from consumption is greater than the social cost of production
c. society is likely to benefit from production taxes
d. none of the above is true
3. Suppose people plant flowering trees near their homes to encourage rare native birds to feed. If people believe that ar increase in native bird populations is valuable, people who plant these trees:
a. generate a negative production externality for their neighbours
b. generate a positive production externality for their neighbours
c. generate a negative consumption externality for their neighbours
d. generate a positive consumption externality for their neighbours
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