Use the Figure Below to Answer the Following Question(s)

question 5

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 5-2
-Figure 5-2 illustrates the market for a product that generates an external cost. S₁ is the private market supply curve, while S₂ is the supply curve including the external cost. Which of the following is true?

• A) Point a illustrates the competitive private market outcome, while point b illustrates the outcome consistent with economic efficiency.
• B) Point b illustrates the competitive private market outcome, while point a illustrates the outcome consistent with economic efficiency.
• C) The competitive private market outcome is consistent with the conditions for economic efficiency.
• D) The good will tend to be undersupplied relative to the conditions for economic efficiency.

---

Definitions:

Language Reaction Hypothesis

Suggests that the language one speaks influences their cognitive processes and reaction to stimuli.

Dynamic Hypothesis

A theory proposing that complex systems or patterns of behavior are characterized by continuous change, adaptation, or progression.

Morphemes

The smallest grammatical units in a language that carry meaning, such as prefixes, roots, and suffixes.

Phonemes

The minimal sound element in a language that differentiates one word from another.