An Example of the Way That Externalities Distort the Allocation

question 62

Multiple Choice

An example of the way that externalities distort the allocation of resources is

• A) positive economic surplus.
• B) positive externalities only.
• C) negative externalities only.
• D) negative economic surplus.
• E) both positive externalities and negative externalities.

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Definitions:

Efficient Estimator

An estimator that achieves the lowest possible variance among all unbiased estimators for a parameter of interest.

Random Sample

A sample drawn from a population in such a way that every individual has an equal chance of being selected, ensuring the sample's representativeness.

Polling Technique

A method used in survey research to collect data from a target population by questioning a representative sample.

Monte Carlo

A statistical method utilizing random sampling to approximate the probability of certain outcomes in decision making or physical systems.