Under What Conditions Do Positive Externalities Exist

question 126

Multiple Choice

Under what conditions do positive externalities exist

• A)Social value exceeds private value, and market quantity exceeds the socially optimal quantity.
• B)Social value is less than private value, and market quantity exceeds the socially optimal quantity.
• C)Social value exceeds private value, and market quantity is less than the socially optimal quantity.
• D)Social value seldom exceeds private value, and therefore social quantity is less than private quantity.

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Definitions:

Nominal Rate

The stated interest rate of a bond or loan, without accounting for compounding or inflation.

Mortgage Loan

A loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty.

Compounded Monthly

A method where the interest is calculated on a monthly basis and added to the principal sum, allowing the interest to grow over time through compounding.

Quarterly Payments

Payments that are made four times a year, often on a financial obligation like a loan or lease.