Consider an Industry Producing Good X

question 68

Multiple Choice

Consider an industry producing good X.The quantity of good X produced in a competitive free market will be less than the socially optimal level if

• A)the consumption of good X generates a negative externality.
• B)the consumption of good X generates a positive externality.
• C)the production of good X generates a negative externality.
• D)the government is subsidizing the production of good X.
• E)good X has negative third party effects associated with its consumption.

---

Definitions:

Ambrosia

Often referred to in mythology as the food or drink of the gods, typically signifying something with an exquisite taste or smell.

Red Price

There is no standard definition for this term in economics; it may be used informally to denote a specific pricing strategy or condition but lacks a general meaning.

Bubble Gum

A variety of gum that can be blown into a bubble from the mouth.

Ambrosia

In mythology, ambrosia is often considered the food or drink of the gods, granting longevity or immortality upon consumption.