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Five-year-old Trevor is emotionally disturbed and refuses to communicate with anyone. To get him to speak,his teacher initially gives him candy for any utterance,then only for a clearly spoken word,and finally only for a complete sentence. The teacher is using the method of
External Costs
Costs of an economic activity that are not borne by the parties directly involved in the transaction but by other individuals or society at large.
Supply Curve
A graph that represents the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale.
Socially Optimal
A condition that maximizes societal welfare, often referring to the optimal distribution of resources and goods.
Government Intervention
Government intervention involves actions taken by a government to affect the economy, which can include regulations, subsidies, and taxes, aiming to correct market failures or achieve social goals.
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