Use the Figure Below to Answer the Following Question(s)

question 21

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 5-2

-Figure 5-2 illustrates the market for a product that generates an external cost.S₁ is the private market supply curve,while S₂ is the supply curve including the external cost.Which of the following is true?

• A)Relative to economic efficiency,output of the good will be too large and the price too low.
• B)Relative to economic efficiency,output of the good will be too large and the price too high.
• C)Relative to economic efficiency,output of the good will be too small and the price too low.
• D)Relative to economic efficiency,output of the good will be too small and the price too high.

---

Definitions:

Objective Measurement

The process of quantifying performance, behavior, or attributes using methods that are independent of personal opinions or biases.

Competency-Based Rewards

A system of compensation that aligns employee rewards with their abilities to perform specific competencies or skills effectively.

Motivator-Hygiene Theory

A theory that suggests job satisfaction and dissatisfaction arise from different sets of factors: motivators lead to satisfaction, while the absence of hygiene factors leads to dissatisfaction.

Employee Motivation

The combined internal and external factors that influence an employee's enthusiasm and willingness to invest effort in achieving organizational objectives.