When Negative Externalities Are Present in a Market

question 347

Multiple Choice

When negative externalities are present in a market,

• A)producers will be affected but consumers will not.
• B)producers will supply too much of the product.
• C)demand will be too high.
• D)the market will still maximize total benefits.

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Definitions:

Absolute Threshold

The lowest level of stimulation that an organism can detect at least 50% of the time.

Attention

The process of sorting through sensations and selecting some of them for further processing.

Difference Threshold

The smallest difference in stimulus intensity required to detect a difference between two stimuli, also known as the just noticeable difference (JND).

Cornea

The tough, transparent, protective layer that covers the front of the eye and bends light rays inward through the pupil.