When Consumption of a Good Creates Positive Externalities

question 47

Multiple Choice

When consumption of a good creates positive externalities,

• A)the private demand curve shifts rightward
• B)the private demand curve shifts leftward
• C)the private demand curve is below the marginal social benefit curve
• D)the private demand curve is above the marginal social benefit curve
• E)the equilibrium quantity determined by the free private market is too high

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Definitions:

Cognitive Psychology

The school of psychology that sees humans as active participants in their environment; studies mental processes such as memory, problem solving, reasoning, decision making, perception, language, and other forms of cognition.

Evolutionary Biology

is the study of the origins and variations of organisms, as well as the processes of natural selection and evolution.

Neuroscience

An interdisciplinary field that combines the work of psychologists, biologists, biochemists, medical researchers, and others in the study of the structure and function of the nervous system.

Information-Processing

A cognitive approach that describes how the mind operates in terms of receiving, storing, and retrieving information.