When the Government Intervenes in Markets with External Costs, It

question 28

Multiple Choice

When the government intervenes in markets with external costs, it does so in order to:

• A) protect the interests of bystanders.
• B) ensure all the costs are born by producers.
• C) ensure all the costs are born by consumers.
• D) increase the welfare losses of producers.

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Definitions:

Transitivity

In mathematics and logic, the property of a relation where if it applies between successive pairs like a is to b and b is to c, it also applies directly between a and c.

Cognitive Development

The process by which a person's ability to think, understand, and learn grows and evolves throughout life.

Working Memory

The structure of memory that can hold a sensory stimulus for up to 30 seconds after the trace decays.

Long-term Memory

The phase of the memory process that is capable of storing information for extended periods, ranging from hours to a lifetime.