If People Took External Costs, Such as Pollution, into Consideration

question 66

Multiple Choice

If people took external costs, such as pollution, into consideration when deciding how much to consume of goods that cause externalities, they would:

• A)consume a socially non-optimal amount.
• B)not change their consumption behavior.
• C)consume more.
• D)consume less.

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Definitions:

Risk-free Return

The theoretical return on investment with no risk of financial loss, often represented by the yield on risk-free government bonds.

Standard Deviation

A measure of the dispersion or variability of a set of data points from their mean, used in finance to indicate the volatility of an investment.

Defined Contribution Plan

A retirement plan where an employee, employer, or both make contributions on a regular basis, but the final benefit received depends on the plan's investment performance.

Risk-free Return

The theoretical return on an investment with zero risk of financial loss, typically associated with government bonds.