In the Following Graph, MPC and MSC Represent the Marginal

question 4

Multiple Choice

In the following graph, MPC and MSC represent the marginal private cost and marginal social cost of producing a good respectively. QD represents the demand for the good. Refer to the graph to answer the question. Which of the following statements is true?

• A) The MPC of production is greater than the MSC of producing the good.
• B) The quantity of the good produced in the market will be higher than the socially optimal
• C) For the market to produce the socially optimal level of output, the government should provide a subsidy.
• D) There is a positive externality associated with the production and consumption of this

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Definitions:

Self-Reference Effect

The finding that information bearing on the self is processed more thoroughly and more deeply, and hence remembered better, than other information.

Public Self-Awareness

Looking outward on the public aspects of the self that others can see and evaluate.

Private Self-Awareness

Looking inward on the private aspects of the self, including emotions, thoughts, desires, and traits.

Independent Self-Awareness

A psychological state where an individual sees themselves as separate from others, focusing on personal traits and the ability to control their own fate.