Figure 10-13

question 181

Multiple Choice

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics.
-Refer to Figure 10-13. If 250 units of plastics are produced and consumed, then the

• A)social optimum has been reached.
• B)market equilibrium has been reached.
• C)negative externality associated with plastics has been eliminated.
• D)positive externality associated with plastics has been eliminated.

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Definitions:

Budget Constraint

The limits imposed on household choices by income, prices, and taxes, defining the combination of goods and services they can afford.

Income

Proceeds obtained, often periodically, from labor or investment returns.

Utility

A measure of satisfaction or happiness that consumers derive from the consumption of goods and services.

Perfect Substitutes

Two goods that could be used in place of each other with no loss of utility to the consumer.