The existence of marginal external benefits for a product like higher education creates a deadweight loss for society because,without government intervention,________ would be consumed and ________ would be produced.
A) more than the efficient amount; more than the efficient amount
B) more than the efficient amount; less than the efficient amount
C) less than the efficient amount; more than the efficient amount
D) less than the efficient amount; less than the efficient amount
E) the efficient amount; the efficient amount

Question

Quizplus · Accepted Answer

When there are marginal external benefits, the market without government intervention tends to consume and produce less than the efficient amount, leading to a deadweight loss.

The Existence of Marginal External Benefits for a Product Like