When a Negative Externality Exists, the Private Market Produces

question 255

Multiple Choice

When a negative externality exists, the private market produces

• A)more than the economically efficient output level.
• B)less than the economically efficient output level.
• C)products at a low opportunity cost.
• D)products at a high opportunity cost.

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Definitions:

Whistleblower

An employee who discloses organizational wrongdoing to parties who can take action.

Virtuous Circle

The idea that corporate social performance and corporate financial performance feed and reinforce each other.

Corporate Profits

The surplus income of a company after all expenses have been deducted from revenues, indicating the financial health and earning power of the business.

Social Performance

An organization’s effectiveness in achieving social objectives and creating positive impact on society, often considered alongside financial performance.