Markets Fail When Externalities Are Present

question 40

Multiple Choice

Markets fail when externalities are present

• A) because all of the costs and benefits of producing a good are reflected in the market price.
• B) because some of the costs and benefits of producing a good are not reflected in the market price.
• C) only if they are negative; positive externalities are not market failures.
• D) because profits are not maximized.
• E) if the positive externalities are less than the negative externalities.

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Definitions:

Administrative Supplies

Administrative supplies include the essential office items and materials used for administrative tasks, such as filing, scheduling, and documentation.

Clinical Supplies

Materials and items used in clinical settings for patient care, diagnostics, treatments, and procedures, including medical instruments and disposables.

Environmental

Relating to the natural and human-influenced surroundings in which living organisms exist.

Laboratory

A workplace for scientific research, experiments, testing, or analysis, often equipped with specific instruments and materials.