The Market Failure of External Cost Is Most Likely to Result

question 139

Multiple Choice

The market failure of external cost is most likely to result if Peanuts 'R' Us:

• A) keeps secret a discovery that excessive consumption of peanut butter causes nearsightedness.
• B) discards broken peanut shells onto an adjacent recreational area in its production of peanut butter.
• C) is subject to performance standard regulations by the PBRC (Peanut Butter Regulatory Commission).
• D) develops a new peanut butter processing machine that enhances competition.

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Definitions:

Authoritative

A parenting style characterized by high responsiveness and high demands, aiming to guide children's activities in a rational, issue-oriented manner.

Preconventional

Refers to a stage of moral development where individuals' ethical principles are guided by the potential consequences of their actions, such as punishment or reward.

Formal Operational

The stage in Piaget’s theory of cognitive development where individuals gain the ability to think abstractly and reason logically.

Autism

A condition of developmental nature marked by difficulties in social interaction and communication, accompanied by limited and repetitive actions.