When External Costs Are Present in a Market

question 100

Multiple Choice

When external costs are present in a market,

• A) less of the good will be produced than the amount consistent with economic efficiency.
• B) more of the good will be produced than the amount consistent with economic efficiency.
• C) the amount of the good produced will be equal to the amount consistent with economic efficiency.
• D) corresponding external benefits are always generated.

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Definitions:

Functional Autonomy

The concept that behaviors can become detached from their original motives and gain new ones; often discussed in psychology and behaviorism.

Verstehen

A method in sociology for understanding social behavior by putting oneself in the place of others.

Social Behavior

Actions and interactions among individuals within a society, shaped by social norms, cultures, and structures.

Value-Free

The principle that the conduct and analysis of scientific research should be objective and unaffected by the personal values or biases of the researcher.