Which of the Following Statements Is Most Correct About a Market

question 65

Multiple Choice

Which of the following statements is most correct about a market that is characterised by a negative production externality?

• A)the equilibrium quantity of output is equal to the socially optimal quantity
• B)the equilibrium quantity of output is greater than the socially optimal quantity
• C)government intervention is only required for negative externalities
• D)the equilibrium quantity of output is less than the socially optimal quantity

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Definitions:

Salvage Value

The estimated resale value of an asset at the end of its useful life.

Annual Retirement Income

The total amount of income a person receives in one year after retiring from work, which can come from pensions, savings, investments, or other sources.

After Tax

Refers to the amount of money or income that remains after all federal, state, and withholding taxes have been deducted.

Annual Return

The percentage of change in an investment's value over a one-year period, including any dividends or interest earned.