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

question 215

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 S₁ represent?

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

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Definitions:

Heteronomous Morality

A stage in child development where moral reasoning is based on external authorities and consequences rather than personal ethical principles.

Autonomous Morality

A stage in moral development where individuals recognize that rules and laws are created for the welfare of the population and can be questioned.

Jean Piaget

A Swiss psychologist known for his pioneering work in child development, particularly his theory of cognitive development that describes how children develop intellectually throughout the course of childhood.

Juvenile Delinquency

Involves illegal or antisocial behaviors committed by individuals who are under the age of majority.