Graph 10-2
This graph reflects the market for kiwifruit, where pesticide used by kiwifruit orchardists also unintentionally kills honey bees.
-Refer to Graph 10-2. The difference between the social cost curve and the supply curve reflects the:
A) profit margin of each kiwifruit tray
B) cost of spillover effects from the kiwifruit orchards (replacing bees, lost honey output)
C) value of kiwifruit to society as a whole
D) amount by which the government should subsidise the kiwifruit orchardists

Question

Graph 10-2
  This graph reflects the market for kiwifruit, where pesticide used by kiwifruit orchardists also unintentionally kills honey bees.
-Refer to Graph 10-2. The difference between the social cost curve and the supply curve reflects the:
A) profit margin of each kiwifruit tray 
B) cost of spillover effects from the kiwifruit orchards (replacing bees, lost honey output) 
C) value of kiwifruit to society as a whole 
D) amount by which the government should subsidise the kiwifruit orchardists

Quizplus · Accepted Answer

The difference between the social cost curve and the supply curve reflects the cost of spillover effects from the kiwifruit orchards, such as replacing bees and lost honey output, which are negative externalities that are not included in the private costs of the producers.

Graph 10-2 This Graph Reflects the Market for Kiwifruit, Where