A small firm burning compost to produce energy opens next to an urban farm in London. The firm emits greenhouse gases that compromise the health of the farm animals. The firm's owners interact regularly with the urban farm's owners. Without any government intervention do you expect the firm and the urban farm to produce a socially efficient output? Is there an externality? Select one: O a. The output will not be efficient because the urban farm will produce more than optimal; there is an externality caused by the firm. o b. The output will not be efficient because the firm will produce less than optimal; there is an externality caused by the firm. c. The output will not be efficient because the firm will produce more than optimal; there is an externality caused by the firm. o d. The output will not be efficient because the urban farm will produce less than optimal; there is no externality.

A small firm burning compost to produce energy opens next to an urban farm in London. The firm emits greenhouse gases that compromise the health of the farm animals. The firm's owners interact regularly with the urban farm's owners. Without any government intervention do you expect the firm and the urban farm to produce a socially efficient output? Is there an externality? Select one: O a. The output will not be efficient because the urban farm will produce more than optimal; there is an externality caused by the firm. o b. The output will not be efficient because the firm will produce less than optimal; there is an externality caused by the firm. c. The output will not be efficient because the firm will produce more than optimal; there is an externality caused by the firm. o d. The output will not be efficient because the urban farm will produce less than optimal; there is no externality.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 3PA

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A small firm burning compost to produce energy opens next to an urban farm in London. The firm emits greenhouse gases that compromise the health of the farm animals. The firm's owners interact regularly with the urban farm's owners. Without any government intervention do you expect the firm and the urban farm to produce a socially efficient output? Is there an externality? Select one: o a. The output will not be efficient because the urban farm will produce more than optimal; there is an externality caused by the firm. o b. The output will not be efficient because the firm will produce less than optimal; there is an externality caused by the firm. o . The output will not be efficient because the firm will produce more than optimal; there is an externality caused by the firm. o d. The output will not be efficient because the urban farm will produce less than optimal; there is no externality.
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