When There Is an Externality in the Production of a Good

question 55

Multiple Choice

When there is an externality in the production of a good:

• A) the value that consumers get from consuming the good is equal to the cost of producing the good.
• B) some costs are passed on to individuals not involved in production or consumption.
• C) the market for the good is likely to be perfectly competitive.
• D) resource allocation is likely to be allocatively e?cient.

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Definitions:

Antianxiety Drug

Medication prescribed to relieve anxiety and reduce tension and fear.

MAO Inhibitor

A class of antidepressant drugs that work by inhibiting the enzyme monoamine oxidase, thus increasing levels of certain neurotransmitters in the brain.

Antianxiety Drugs

Medications designed to reduce symptoms of anxiety through alterations in brain chemistry, promoting relaxation and reducing panic and fear.

Tardive Dyskinesia

A side effect of some antipsychotic medications, characterized by involuntary, repetitive body movements such as grimacing, tongue protrusion, and lip smacking.