-The Figure Above Shows the Market for a Good with an External

question 116

Multiple Choice

-The figure above shows the market for a good with an external benefit.If the market is competitive and the government takes no action,the equilibrium quantity of ________ units is inefficient because ________.

• A) 8; marginal benefit exceeds marginal cost
• B) 8; marginal cost exceeds marginal benefit
• C) 10; marginal cost exceeds marginal benefit
• D) 10; marginal social benefit exceeds marginal benefit
• E) 10; marginal external benefit exceeds marginal social benefit

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Definitions:

Schachter

Stanley Schachter, a psychologist known for his research on social and emotional factors in group cohesion, particularly relating to anxiety and affiliation.

Anxious

Experiencing worry, unease, or nervousness, typically about an imminent event or something with an uncertain outcome.

Affiliation

The state or process of being closely associated or connected with an organization, group, or another individual, particularly in terms of shared goals, identity, or interests.

Accurate Information

Information that is correct, precise, and free from error.