Suppose That a Negative Externality Is Created by the Production

question 350

Multiple Choice

Suppose that a negative externality is created by the production of good X. Which of the following statements is correct?

• A)The social cost of producing good X includes the private cost plus the cost to bystanders of the externality.
• B)The increased social cost can be graphed as a decrease in demand.
• C)The market equilibrium quantity will be the socially optimal quantity as long as the government does not interfere.
• D)Both a and b are correct.

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Definitions:

Embryonic

Pertaining to an embryo, which is an early stage in the development of organisms, prior to birth or hatching.

Fetal

Fetal refers to a stage of development that takes place in the womb, from the end of the embryonic stage until birth.

Prenatal Cortical Development

The process of brain development during the prenatal period, including the formation of the cerebral cortex.

Inside-Out

An approach or process that starts from within a system and works its way outward, often used in problem-solving and development strategies.