ToasterOvensInc

question 56

Multiple Choice

ToasterOvensInc. is developing technology to make a toaster oven than uses less electricity. If successful, the technology will significantly reduce the amount of energy that is wasted due to product inefficiencies. If the firm sells only in response to the market price, the quantity shown in the third column of the table below is supplied. If the firm were also to receive the broader social benefits of the new technology, the willingness to supply is shown in the fourth column.

If the firm were to receive a price based only on private benefits, the equilibrium price and quantity would be

• A) $16, 740
• B) $17, 680
• C) $18, 620
• D) $19, 660

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Definitions:

Behaviorism

Study of the impact of reinforcements and punishments on behavior.

Reinforcement

In behavioral psychology, a consequence applied that will strengthen an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Consequences

Outcomes or results that follow from an action or condition, often with implications for responsibility and decision-making.

Psychoanalytic Theories

A set of theories which focus on the unconscious motivations that shape personality and behavior, originally developed by Sigmund Freud.