When a Negative Externality Exists in a Market, the Cost

question 170

Multiple Choice

When a negative externality exists in a market, the cost to producers

• A)is greater than the cost to society.
• B)will be the same as the cost to society.
• C)will be less than the cost to society.
• D)will differ from the cost to society, regardless of whether an externality is present.

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Definitions:

Psychological Dependence

A form of dependence characterized by a perceived need for a substance or behavior to achieve a sense of well-being or to avoid discomfort.

Physiological Dependence

A state in which the body has adapted to the presence of a drug or substance, leading to withdrawal symptoms when the substance is reduced or discontinued.

Cardiac Problems

Health issues related to the heart, including conditions such as coronary artery disease, heart attacks, arrhythmias, and heart failure.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance, often without basis in reality.