In What Sense Do Externalities Cause the "Invisible Hand" of the Marketplace

question 207

Multiple Choice

In what sense do externalities cause the "invisible hand" of the marketplace to fail?

• A)Externalities lead to government intervention in markets, which exacerbates the problems associated with externalities.
• B)Externalities result in prices that are too high for many consumers to pay.
• C)Markets fail to produce the maximum total benefit to society when positive or negative externalities are present.
• D)Markets produce too little of a good when positive or negative externalities are present.

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Definitions:

Command and Control Culture

An organizational culture characterized by strict hierarchy, where decisions and orders come from the top down.

Literacy Levels

The extent to which individuals have reading and writing skills, impacting their ability to communicate and access information.

Safety Violations

Acts or omissions that breach established safety protocols, potentially putting individuals at risk.

Productivity Levels

The rate at which goods or services are produced relative to the input of resources, often used as a measure of efficiency.