When Does a Negative Externality Exist

question 22

Multiple Choice

When does a negative externality exist?

• A) whenever marginal social cost exceed marginal private costs
• B) whenever marginal social costs exceed marginal social benefits
• C) whenever marginal social benefits exceed marginal private benefits
• D) whenever marginal private costs exceed marginal private benefits

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Definitions:

Social Learning Theory

A theory that suggests people learn from one another, via observation, imitation, and modeling, emphasizing the importance of cognitive processes in learning.

Cognition

The psychological process involved in learning and grasping concepts through experiences, thinking, and the use of the senses.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, driven by the desire to fulfill a need or achieve a goal.

Nontraditional Views

Perspectives or opinions that differ from or challenge conventional wisdom or accepted norms.