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:

1st Quartile

The 1st quartile, also known as the lower quartile, is a statistical measure that divides the lowest 25% of data in a dataset from the highest 75%.

3rd Quartile

The value below which 75% of the data in a dataset falls, marking the upper quartile in a distribution of values.

Negatively Skewed Distribution

A distribution where the tail on the left side of the probability density function is longer or fatter than the right side.

1st Quartile

The value below which 25% of the data falls, often used in statistics to measure the spread of a data set.