Figure: Correcting for Market Failure (Figure: Correcting for Market

question 204

Multiple Choice

Figure: Correcting for Market Failure (Figure: Correcting for Market Failure) Assume that there is an external cost involved in the market illustrated in the figure The figure Correcting for Market Failure.If the government forces the private-sector firms to face the external cost, then:

• A)the supply curve shifts to the right, from S2 to S1.
• B)the supply curve shifts to the left, from S1 to S2.
• C)the supply curve is unaffected.
• D)price per unit decreases.

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Definitions:

Substrate

The underlying substance or layer on which an organism lives, grows, or is attached, or a material upon which an enzyme acts.

Isomerases

Enzymes that catalyze the rearrangement of atoms within a molecule, often crucial in metabolic pathways.

Isomeric Form

Variants of a molecule that have the same molecular formula but differ in the arrangement of atoms within the molecule or in their spatial orientation.

Enzyme

Biological molecules that significantly speed up the rate of virtually all the chemical reactions within cells.