If an Externality Is Present in a Market, Economic Efficiency

question 129

Multiple Choice

If an externality is present in a market, economic efficiency may be enhanced by

• A)increased competition.
• B)weakening property rights.
• C)better informed market participants.
• D)government intervention.

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Definitions:

Means-ends Rationality

A decision-making process focused on efficiently achieving a specific goal.

Desired Outcome

The specific result or achievement one aims to accomplish through a particular course of action or strategy.

Value Rationality

A type of decision-making process where actions are chosen based on a consistent system of values, rather than solely on instrumental, goal-oriented reasoning.

Affective Action

refers to behaviors motivated by emotions and feelings, highlighting the role of affect in guiding human actions and decisions.