In the Case of a Negative Externality, the Socially Optimal

question 90

Multiple Choice

In the case of a negative externality, the socially optimal output naturally exists if

• A)the external costs associated with the negative externality are extremely small.
• B)the external costs divided by price is equal to price divided by marginal private cost.
• C)there are no free riders.
• D)the public good aspects of the negative externality outweigh the costs incurred by the negative externality.
• E)none of the above

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Definitions:

Leptin

A hormone produced by fat cells that helps to regulate body weight by signaling satiety to the brain.

Sleeptalking

The occurrence of speaking during sleep without being aware of it, ranging from simple mumblings to complex dialogues, and often considered a benign sleep disorder.

REM Sleep

Rapid Eye Movement sleep, a unique phase of sleep characterized by random rapid movement of the eyes, low muscle tone throughout the body, and the propensity of the sleeper to dream vividly.

N1 Sleep

The initial stage of the sleep cycle, characterized by light sleep, where one can be easily awakened and might experience sudden muscle contractions known as hypnic jerks.