In a Competitive Market,a Negative Externality Creates a Deadweight Loss

question 113

Multiple Choice

In a competitive market,a negative externality creates a deadweight loss because

• A) the cost of the externality is double counted.
• B) a harm is generated.
• C) price equals social marginal cost.
• D) price equals private marginal cost.

---

Definitions:

Watching Condition

A scenario or setup in experiments where subjects observe events or behaviors without intervening, often used to gather naturalistic data.

Predicting Condition

Refers to specifying the criteria or conditions under which certain outcomes are expected to occur.

Dunnett Test

A post hoc test used after ANOVA to compare multiple groups against a single control group, assessing if there are significant differences between the control and each of the other groups.

Scheffé Test

A statistical procedure for comparing more than two means while controlling the overall Type I error rate.