Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000^th gallon of gasoline entails the following:
• a private cost of $3.10;
• a social cost of $3.55;
• a value to consumers of $3.70.
-Refer to Scenario 10-1. The production of the 1,000^th gallon of gasoline entails an

A) external cost of $0.15.
B) external cost of $0.45.
C) external benefit of $0.15.
D) external benefit of $0.45.