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.

---

Definitions:

Heterarchy

A form of organization where elements are unranked or where they possess the potential to be ranked in a number of different ways.

Power Struggles

Conflicts arising from two or more parties competing for control, authority, or dominance within an organization or relationship.

Dynamic Power Shifting

The continuous change in the distribution of power among individuals or groups within a particular context or over time.

Constant Infighting

Ongoing, persistent conflicts or struggles for power within a group, organization, or institutional setting, often hindering progress or unity.