If Production of a Good Creates Negative Externalities,then the Market

question 5

Multiple Choice

If production of a good creates negative externalities,then the market

• A)will under produce it
• B)will over produce it
• C)must be perfectly competitive
• D)must be constrained by barriers to entry
• E)will produce the most efficient quantity

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Definitions:

Approach-Approach

A psychological conflict that occurs when a person has to choose between two desirable options.

Hedonic-Utilitarian

This refers to the dichotomy in consumer preferences and buying behavior, where hedonic pertains to seeking pleasure, and utilitarian involves practical or functional aspects.

Motivational Conflict

A situation where an individual faces competing desires or goals, which can lead to indecision or stress.

Homeostasis

The self-regulating process by which biological systems maintain stability and equilibrium while adjusting to conditions that are optimal for survival.