Private Markets Fail to Reach a Socially Optimal Equilibrium When

question 37

Multiple Choice

Private markets fail to reach a socially optimal equilibrium when positive externalities are present because the

• A)private benefit equals the social benefit at the private market solution.
• B)private cost exceeds the private benefit at the private market solution.
• C)social value exceeds the private value at the private market solution.
• D)private cost exceeds the social benefit at the private market solution.

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Definitions:

Ulrich Beck

Ulrich Beck was a German sociologist best known for his work on risk society, individualization, and reflexive modernization.

Transnational Organizations

Entities that operate across multiple countries, transcending national boundaries to achieve their objectives.

Neoliberalism

An economic and political ideology that emphasizes free-market capitalism, deregulation, and a reduction in government spending on social services.

Global Economy

An interdependent economy worldwide where the economies of countries are linked through global trade and financial markets.