Scenario: the Production of a Good Creates a Negative Externality

question 192

Multiple Choice

Scenario: The production of a good creates a negative externality. The following figure shows the market for this good.

-Refer to the scenario above.The socially optimal price for this good is ________,while the market price of it is equal to ________.

• A) $14; $10
• B) $20; $10
• C) $20; $14
• D) $14; $20

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Definitions:

Good Scientists

Individuals who rigorously apply the scientific method, exhibit curiosity, maintain objectivity, and demonstrate integrity in their research.

New Ideas

In psychology, this can refer to innovative theories, practices, or approaches that challenge existing paradigms.

Disclosure

The action of making new or secret information known.

Covert Research

Covert research refers to studies where the subjects are unaware they are being observed or studied, often used in sociology and psychology to observe natural behaviors without the influence of the observer's presence.