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Falsifying Scientific Theories: In many simple expositions of the scientific method, it is often stated that if a scientific theory makes an incorrect prediction, it is falsified and must be discarded. Argue against this simple view of the scientific method by using the Algol paradox (Section 13.4)as a case study. In particular, why did astronomers not discard the theory of stellar evolution despite an apparent direct contradiction of a fundamental prediction of stellar evolution, that more massive stars evolve faster than less massive stars?
Market Failure
A situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.
Allocated Efficiently
Refers to the optimal distribution of resources and goods in a way that maximizes the welfare or utility of consumers.
External Costs
Expenses that a business or economic activity imposes on unrelated third parties or the environment, which are not reflected in market prices.
External Benefits
External Benefits are positive effects of a production or consumption activity on third parties who did not directly participate in the economic transaction.
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