Why Do US Economists Commonly Refer to Externalities as an Example of Example

question 83

Multiple Choice

Why do U.S. economists commonly refer to externalities as an example of market failure?

• A) firms that are required to pay social costs of externalities produce more
• B) externalities present a case where markets consider all social costs
• C) externalities present a case where markets only consider some social costs
• D) firms avoid having to pay social costs of externalities by lowering prices

---

Definitions:

Piaget

A Swiss developmental psychologist best known for his theory of cognitive development that describes how children develop logical thinking over time.

Pretend Play

Imaginative play where children create scenarios and roles that mimic real life or fantastical situations.

Large Pillow

A significantly sized cushion used for support or decoration in seating or bedding.

Pony

A small horse breed with a distinctive gentle disposition and sturdy build, often used for riding and educational purposes.