A Supply and Demand Model Is A

question 54

Multiple Choice

A supply and demand model is a:

• A) path-dependent model.
• B) model that considers only important feedback effects.
• C) model that considers all feedback effects.
• D) model that does not consider feedback effects.

---

Definitions:

Positive Externalities

Benefits that are enjoyed by a third-party or the society at large, as a result of an economic transaction.

Socially Optimal Level

The socially optimal level is the quantity of production or consumption where the marginal social cost equals the marginal social benefit, maximizing overall welfare.

Policymakers

Individuals or groups responsible for making decisions and establishing regulations that guide the economic, social, and political governance of a society.

Marginal Benefit

The plus in satisfaction or usefulness someone gets by consuming an extra unit of a given product or service.