Consider Two Goods - One That Generates External Benefits and Another

question 127

Multiple Choice

Consider two goods - one that generates external benefits and another that generates external costs. The actual market outcome would

• A) result in a price that is lower than the efficient price for both goods.
• B) result in a price that is higher than the efficient price for both goods.
• C) result in a price that is lower than the efficient price for the good with an external benefit and a price that is higher than the efficient price for the good with an external cost.
• D) result in a price that is higher than the efficient price for the good with an external benefit and a price that is lower than the efficient price for the good with an external cost.

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Definitions:

Reappraisal

Reappraisal is a cognitive process that involves changing one's interpretation of a situation to alter its emotional impact.

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Organized gatherings where people come together to engage in laughter exercises and activities for health and happiness benefits.

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A psychological term referring to the experience of pleasant emotions and moods.

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The changes in the normal biological functioning of the body that result from disease, disorder, or external stimulation.