If There Are External Benefits or Positive Externalities Associated with the Consumption

question 95

Multiple Choice

If there are external benefits or positive externalities associated with the consumption of a good or service:

• A)the private demand curve will overestimate the true demand curve.
• B)the private demand curve will underestimate the true demand curve.
• C)consumers will be willing to pay for all these benefits in private markets.
• D)the market demand curve will be the vertical summation of the individual demand costs.

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Definitions:

Defense Mechanisms

Protective strategies unconsciously applied to avoid the discomfort arising from thoughts or feelings that are not acceptable.

Id Impulses

The instinctive and primitive behaviors and urges that are derived from the id part of the psyche, according to Freudian theory.

Superego

In psychoanalytic theory, the part of the personality responsible for ideals, moral standards, and conscience.