Which of the Following Would Some Economists Be Likely to Perceive

question 76

Multiple Choice

Which of the following would some economists be likely to perceive as the most appropriate public policy response to a positive externality created by the development of a highly innovative new technology?

• A) not taking into account the negative externality associated with social benefit
• B) not taking into account the positive externality associated with social benefit
• C) have reasonable rates of return not based on a notion of unearned social benefits
• D) develop ways to provide a greater share of the social benefits to the innovator

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Definitions:

Alcoholism

A chronic disease characterized by uncontrolled drinking and preoccupation with alcohol, often leading to a range of physical, psychological, and social problems.

Drug Addiction

A chronic disease characterized by compulsive, or uncontrollable, drug seeking and use despite harmful consequences and changes in the brain, which can be long-lasting.

Physiological Effects

Changes in the body's normal functions that result from disease, substances, or psychological states.

Schizophrenia

A long-term mental disorder involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation.