Why Do Private Markets Fail to Reach a Socially Optimal

question 192

Multiple Choice

Why do private markets fail to reach a socially optimal level when negative externalities are present

• A)Private benefit exceeds social benefit at the private market solution.
• B)Private costs exceed social costs at the private market solution.
• C)Social costs exceed private costs at the private market solution.
• D)Social benefit exceeds private benefit at the private market solution.

---

Definitions:

Inborn Potential

The inherent capacity or natural ability present from birth that can develop into talents or skills with encouragement and practice.

Abraham Maslow

An American psychologist known for creating Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs in priority, culminating in self-actualization.

Self-Actualization

The realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone, the highest level in Maslow's hierarchy of needs.

Self-Actualization

The achievement of realizing one's abilities and possibilities, seen as an inherent motivation or necessity in all individuals.