Consider Two Goods--One That Generates External Costs and Another That

question 98

Multiple Choice

Consider two goods--one that generates external costs and another that generates external benefits. The actual market outcome would

• A) result in output that is lower than the efficient output for both goods.
• B) result in output that is higher than the efficient output for both goods.
• C) result in output that is lower than the efficient output for the good with an external benefit and output that is higher than the efficient output for the good with an external cost.
• D) result in output that is higher than the efficient output for the good with an external benefit and output that is lower than the efficient output for the good with an external cost.

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Definitions:

Steroids

Complex molecules containing carbon atoms arranged in four attached rings, three of which contain six carbon atoms each and the fourth of which contains five (e.g., cholesterol and certain hormones, including the male and female sex hormones of vertebrates).

Purine Base

A type of nitrogen-containing base, including adenine and guanine, which are components of DNA and RNA.

Guanine

A nitrogenous purine base that is a component of nucleic acids and GTP.

Nucleotides

Nucleotides are the basic building blocks of nucleic acids, such as DNA and RNA, consisting of a nitrogenous base, a sugar molecule, and one or more phosphate groups.