Exhibit 31-1 -Refer to Exhibit 31-1.This Graph Represents a Negative Externality Situation.Given

question 35

Multiple Choice

Exhibit 31-1

-Refer to Exhibit 31-1.This graph represents a negative externality situation.Given this,which of the two curves,X or Y,represents marginal social costs and why?

• A) Curve X, because if there is a negative externality, external costs are associated with it: social costs = external costs + private costs, therefore the marginal social cost curve must lie above the marginal private cost curve.
• B) Curve Y, because if there is a negative externality, negative external costs are associated with it: social costs = negative external costs + private costs, therefore the marginal social cost curve must lie below the marginal private cost curve.
• C) Curve X, because if there is a negative externality, external benefits are associated with it: social costs = external benefits + private costs, therefore the marginal social cost curve must lie above the marginal private cost curve.
• D) Curve Y, because if there is a negative externality, negative external benefits are associated with it: social costs = negative external benefits + private costs, therefore the marginal social cost curve must lie below the marginal private cost curve.

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Definitions:

Relationship Mobility

The degree to which individuals in a society feel free to choose and switch their interpersonal relationships and social groups.

Collectivistic Cultures

Societies where individuals prioritize the group's needs and goals over their own, emphasizing community, cooperation, and interdependence.

Power Distance

A cultural dimension that describes the extent to which individuals in a society accept and expect power to be distributed unequally.

Cross-Cultural Differences

Variations in norms, values, behaviors, and practices among different cultures or societies.