Irrespective of Whether an Externality Is Positive or Negative, All

question 7

Multiple Choice

Irrespective of whether an externality is positive or negative, all solutions share the same goal of:

• A)moving the allocation of resources closer to the market equilibrium
• B)reducing pollution
• C)moving the allocation of resources closer to the social optimum
• D)increasing the conservation of natural resources

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Definitions:

Perfectly Inelastic

A demand scenario where the quantity demanded does not change regardless of price fluctuations.

Income Elasticity

A measure of how much the demand for a good changes in response to a change in consumers' income.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, in contrast to a normal good.

One-Of-A-Kind

An item or phenomenon that is unique and has no identical counterpart.