In the Case of Either an External Cost or an External

question 46

Multiple Choice

In the case of either an external cost or an external benefit,the invisible hand fails to generate the efficient outcome because

• A) the model is not capable of incorporating externalities.
• B) buyers and sellers only take their self interest into account.
• C) too much is produced.
• D) too little is produced.
• E) the environment is treated as a common property.

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Definitions:

Dishonest

Dishonesty entails the act of being untruthful or deceptive in intentions or actions.

Race-car Driver

A professional athlete who competes in motorsport racing, driving high-speed vehicles in competitions.

Caring Father

A paternal figure who shows love, support, and concern for the well-being of their children.

Busy Executive

A high-ranking professional who is often preoccupied with numerous responsibilities and tasks.