Suppose that a firm produces electricity by burning coal. The production process creates a negative externality of air pollution. If the firm does not internalize the cost of the externality, it will produce where:

A. the value of electricity to consumers equals the private cost of producing electricity.
B. the value of electricity to consumers equals the social cost of producing electricity.
C. the cost of the externality is maximized.
D. the transaction costs of private bargaining are minimized.

Which of the following describes one of the ways that the demographics of an area affect the price of housing in that area? a. when more people have children, their incomes tend to be higher and the housing prices are also higher. b. older people are more likely to stay in their houses, creating a seller's market that keeps prices low. c. an area with a lower population density won't have enough construction workers to build new houses quickly. d. an area with younger people will have a higher demand for rentals and a lower demand for buying.