When the Social Cost of an Externality Is Lower Than

question 61

Multiple Choice

When the social cost of an externality is lower than its private cost:

• A)society is likely to benefit from a corrective tax
• B)the externality is a positive one and society will not consume enough of the good
• C)the externality is a positive one and society will consume too much of the good
• D)society will benefit from the introduction of tradeable permits for production of the good

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Definitions:

Classical Conditioning

The process of acquiring knowledge by forming connections between stimuli in the environment and those that occur naturally.

Slot Machines

Mechanical or electronic gambling devices that create a game of chance for their users.

Partial Reinforcement

A conditioning schedule in which only a subset of responses is reinforced, leading to more resistant and persistent behavior.

Spontaneous Recovery

The return of a previously eliminated conditioned response following a period of no exposure.