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-Refer to Figure 15-5

Question 61

Multiple Choice

-Refer to Figure 15-5. If, because of an externality, the economically efficient output is Q<sub>2</sub> and not the current equilibrium output of Q<sub>1</sub>, what does D<sub>1</sub> represent? A) the demand curve reflecting external benefits B) the demand curve reflecting social benefits C) the demand curve reflecting private benefits D) the demand curve reflecting the sum of private and social benefits
-Refer to Figure 15-5. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does D1 represent?


A) the demand curve reflecting external benefits
B) the demand curve reflecting social benefits
C) the demand curve reflecting private benefits
D) the demand curve reflecting the sum of private and social benefits

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