Refer to the Diagram, in Which S Is the Market

question 24

Multiple Choice

Refer to the diagram, in which S is the market supply curve and S1 is a supply curve comprising all costs of production, including external costs. Assume that the number of people affected by these
External costs is large. If the government wishes to establish an optimal allocation of resources in
This market, it should

• A) not intervene because the market outcome is optimal.
• B) subsidize consumers so that the market demand curve shifts leftward.
• C) subsidize producers so that the market supply curve shifts leftward.
• D) tax producers so that the market supply curve shifts leftward.

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Definitions:

Task

A piece of work to be done or undertaken, often requiring effort or skill.

Hochschild

Likely refers to Arlie Russell Hochschild, a sociologist known for her work on emotions, gender, and labor relations.

Suppressing Feelings

The act of intentionally withholding or hiding one's emotional responses or feelings from external expression or recognition.

Cultivates

To foster the growth of something or improve a skill through education, practice, or by nurturing relationships or communities.