Figure 5.1 Figure 5-1 Shows a Market with an Externality. the Current

question 60

Multiple Choice

Figure 5.1

Figure 5-1 shows a market with an externality. The current market equilibrium output of Q₁ is not the economically efficient output. The economically efficient output is Q₂.
-Refer to Figure 5.1.If, because of an externality, the economically efficient output is Q₂ and not the current equilibrium output of Q₁, what does S₂ represent?

• A)the market supply curve reflecting private cost
• B)the market supply curve reflecting social cost
• C)the market supply curve reflecting external cost
• D)the market supply curve reflecting implicit cost

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Definitions:

End-Systolic Volume

The volume of blood in the ventricle of the heart immediately after contraction, before the heart fills again.

End-Diastolic Volume

The volume of blood in the ventricles at the end of diastole, right before the heart contracts.

End-Systolic Volume

The volume of blood left in the ventricle after contraction (systole) and before it begins to fill again.

Cardiac Output

The volume of blood the heart pumps through the circulatory system in one minute, a critical measure of heart function and efficiency.