Since Externalities Tend to Keep Markets from Reaching a Socially

question 395

Multiple Choice

Since externalities tend to keep markets from reaching a socially optimal equilibrium, government action

• A)is always needed because private solutions can never be attained.
• B)is needed when private solutions fail to arise.
• C)will be needed only to correct for positive externalities.
• D)will be needed only to correct for negative externalities.

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Definitions:

Dissociation

A mental process that causes a lack of connection in a person's thoughts, memory, and sense of identity.

Role-Playing

A method or activity in which individuals assume roles and act out parts in a fictional scenario for various purposes.

Gullibility

The tendency to be easily persuaded that something is true or to be easily tricked into believing something without sufficient evidence.

Dissociation

A mental process of disconnecting from one’s thoughts, feelings, memories, or sense of identity.