Figure 4-15 Figure 4-15 Shows a Market with an Externality.The Current Market

question 333

Multiple Choice

Figure 4-15

Figure 4-15 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 4-15.If,because of an externality,the economically efficient output is Q₂ and not the current equilibrium output of Q₁,what does S₁ represent?

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

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Definitions:

Choroid

A layer of the eye containing blood vessels and connective tissue, located between the sclera and retina.

Eyes Turn Inward

Refers to a condition where the eyes are oriented towards the nose, often indicating convergence or a focusing mechanism.

Eyelid

A movable tissue, consisting of skin and muscles, that covers and protects the eye.

Ciliary Body

A structure in the eye that includes the ciliary muscle, which controls the shape of the lens, and the ciliary processes that produce the aqueous humor.