Which of the Following Statements Is TRUE

question 79

Multiple Choice

Which of the following statements is TRUE?

• A)A government policy that eliminates a market failure, but only some people gain while others are kept the same, is not a Pareto improvement.
• B)A government policy that eliminates a market failure, but only some people gain while others are kept the same, is a Pareto improvement.
• C)A government policy that eliminates a market failure and some people gain and some lose only a little, is a Pareto improvement.
• D)A government policy that generates a Pareto improvement eliminates all deadweight loss.

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Definitions:

Salient

Referring to something that is prominent, significant, or conspicuous in a particular context.

Extinction

In behavioral psychology, the gradual weakening and eventual disappearance of a conditioned response when the reinforcement is no longer offered.

Punishment

A consequence applied to decrease or eliminate an unwanted behavior, typically involving either physical or psychological discomfort.

Shaping

A behavioral conditioning technique that involves reinforcing successive approximations toward a desired behavior.