If Some Activity Creates External Benefits as Well as Private

question 117

Multiple Choice

If some activity creates external benefits as well as private benefits, then economic theory suggests that the activity ought to be

• A)taxed.
• B)prohibited.
• C)subsidized.
• D)left alone.

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Definitions:

Stereotype

A widely held but fixed and oversimplified image or idea of a particular type of person or thing.

Physical Appearance

The outward characteristics or look of a person or object, including features such as shape, color, and form.

Social Schemas

Mental structures that organize our knowledge and assumptions about the social world and influence how we process social information.

Subjective

Based on or influenced by personal feelings, tastes, or opinions.