-The Figure Above Shows the Market for a Good with an External

question 77

Multiple Choice

-The figure above shows the market for a good with an external benefit.The efficient level of production is ________ units because ________.

• A) 8; marginal benefit equals marginal cost
• B) 8; marginal cost is less than marginal social benefit
• C) 10; marginal cost equals marginal social benefit
• D) 10; marginal social benefit exceeds marginal benefit
• E) 8; marginal benefit equals the marginal external benefit

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Definitions:

Falling Prices

Falling prices indicate a decrease in the cost of goods and services over a period, which can be symptomatic of deflation or market corrections.

Behavioral Finance

A field of finance that examines how psychological influences and biases affect the financial behaviors of investors and financial markets.

Psychological Factors

Elements of human behavior and cognition that influence financial decision-making and market movements.

Investor Behavior

The study of how psychology influences financial decision-making and market movements.