Suppose External Costs Are Present in a Market Which Results

question 20

Multiple Choice

Suppose external costs are present in a market which results in the actual market price of $84 and market output of 320 units. How does this outcome compare to the efficient, ideal equilibrium?

• A) The efficient price would be higher than $84.
• B) The efficient price would be lower than $84.
• C) The efficient price would also be $84.
• D) The efficient output would be greater than 320 units.

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Definitions:

Biological Influences

Factors at the biological level that affect behavior, cognition, emotions, and health.

Primary Drives

Basic, innate urges such as hunger, thirst, and the desire for warmth, crucial for survival.

Affiliation Motive

An inherent desire to belong to a group or form close personal relationships and social connections.

Innate Drive

An internal motivated force that drives individuals to fulfill basic physiological and psychological needs.