According to Pigovian Analysis,competitive Behavior Will Result in Overproduction of a Good

question 54

Multiple Choice

According to Pigovian analysis,competitive behavior will result in overproduction of a good when

• A) firms' activities create external costs.
• B) people outside of market transactions benefit from those transactions.
• C) property rights have been clearly and unambiguously assigned.
• D) private and social marginal costs are identical.

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Definitions:

Business Saving

Business Saving involves the retention of profits by a business after paying taxes and dividends, meant for future investment or to cover future expenses.

Productivity Growth

An increase in the efficiency of production, measured by the amount of goods and services produced per unit of labor, capital, or other inputs.

1970s and 1980s

A historical period characterized by major economic and political changes worldwide, including inflation and the end of the Cold War.

Productivity Growth

An increase in the efficiency of production within an economy, often measured by the output per unit of input over time.