A Good Technique for Answering Multiple Choice Test Questions Is

question 16

Multiple Choice

A good technique for answering multiple choice test questions is to

• A) save time by selecting the first answer you believe to be correct.
• B) compare the answers to see which one seems most correct.
• C) discard any answers with the words "always" and "never."
• D) read each answer and consider how it relates to the question.

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Definitions:

Externalities

Costs or benefits that affect parties who did not choose to incur those costs or benefits, often leading to market inefficiencies.

MSB

Marginal Social Benefit, which refers to the additional benefit society gains from consuming one more unit of a good or service.

MSC

MSC stands for Marginal Social Cost, which is the total cost to society of producing an additional unit of a good or service, including both private and external costs.

Coase Theorem

An economic theory that suggests that if property rights are clearly defined and transaction costs are negligible, private negotiations will lead to the efficient resolution of disputes regardless of the initial allocation of rights.