All Remedies for Externalities Share the Goal of

question 495

Multiple Choice

All remedies for externalities share the goal of

• A)moving the allocation of resources toward the market equilibrium.
• B)moving the allocation of resources toward the socially optimal equilibrium.
• C)increasing the allocation of resources.
• D)decreasing the allocation of resources.

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Definitions:

New Prices

The latest prices for goods or services, updated from previous values due to factors such as inflation, demand, or production costs.

Utility Function

A representation of a consumer's preference ranking over a set of goods and services, quantifying the satisfaction from each possible choice.

Reservation Price

This is another term for reserve price, meaning the lowest price at which someone is willing to sell a good or service.

Tape Recorder

An electronic device used for recording sound on magnetic tape and usually capable of playback.