A Plausible Example of Market Failure Due to an Externality

question 18

Multiple Choice

A plausible example of market failure due to an externality is

• A)a farmer with an apple orchard who also keeps bees.
• B)the cost of building new highways outside of major cities.
• C)the high salaries enjoyed by professional athletes.
• D)the despoiling of rivers and lakes by nitrogen run- off from agricultural fertilizers.
• E)the line- ups at the theatre when a good movie is playing.

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Definitions:

Behaviour Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through reinforcement methods and conditioning.

Psychiatrists

Medical doctors who specialize in the diagnosis, treatment, and prevention of mental, emotional, and behavioral disorders, often prescribing medication as part of treatment.

Psychoanalytic Methods

Psychological techniques developed by Freud and others to explore the unconscious mind, aiming to understand and treat psychological disorders through analysis of motives and conflicts.

Academic Degree

A qualification awarded to students upon successful completion of a course of study in higher education, usually at a college or university.