If a Negative Externality Exists in the Production of Paper

question 155

Multiple Choice

If a negative externality exists in the production of paper and paper is sold in a perfectly competitive market, at the equilibrium output:

• A) additional net gains to society are possible by reducing the output of paper.
• B) additional net gains to society are possible by increasing the output of paper.
• C) the marginal social benefit of paper equals its marginal social cost.
• D) additional net gains to society are not possible from either increasing or decreasing the output of paper.

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Definitions:

Population

The total number of individuals or organisms of a particular species living within a specific area or region.

Cost Of Raising Children

The financial expenses associated with raising a child from birth to adulthood, including food, housing, healthcare, and education.

Child Labor

The employment of children in any work that deprives them of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially, or morally harmful.

Modern Economies

characterize the advanced and complex economic systems present in today's developed countries, often marked by innovation and technology.