The Diagram Below Shows Demand and Supply Curves for Some

question 58

Multiple Choice

The diagram below shows demand and supply curves for some perfectly competitive market.
FIGURE 16- 2
-Refer to Figure 16- 2.Suppose that the marginal benefit curve (MB) includes all social benefits and that there is a negative externality in production.In this case,for allocative efficiency.

• A)the price P1 is appropriate but the quantity Q1 is too low
• B)P1 and Q1 are appropriate
• C)the price P1 is too high and the quantity Q1 is too low
• D)the price P1 is appropriate but the quantity Q1 is too high
• E)the price P1 is too low and the quantity Q1 is too high

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Definitions:

Disgust

A feeling of intense disgust or aversion triggered by something seen as repulsive or disagreeable.

Joy

Joy is a feeling of great pleasure and happiness, often arising from a sense of well-being or fulfillment.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, associated with complex cognitive behavior, personality expression, decision making, and moderating social behavior.

Negative Emotions

Feelings that are generally perceived as unpleasant, such as sadness, anger, and fear, influencing both thought processes and behavior.