Consider Two Goods-One That Generates External Benefits and Another That

question 71

Multiple Choice

Consider two goods-one that generates external benefits and another that generates external costs. What would a competitive market economy tend to produce?

• A) too little of both goods, relative to the social optimum
• B) too much of the good that generates external benefits relative to the social optimum, and too little of the good that generates external costs
• C) too little of the good that generates external benefits relative to the social optimum, and too much of the good that generates external costs
• D) too much of both goods, relative to the social optimum

---

Definitions:

Intelligence

The ability to learn, understand complex ideas, adapt to new situations, solve problems, and use knowledge to manipulate one's environment.

Personality

The unique combination of emotional, attitudinal, and behavioral response patterns of an individual.

Diversity

The state of having a range of different characteristics, backgrounds, races, genders, or ideas within a group or society.

Development

Refers to the process of growth and change that happens in biological, emotional, and cognitive areas across the lifespan.