If a Production Process Creates Positive Externalities,a Competitive Market Produces

question 14

Multiple Choice

If a production process creates positive externalities,a competitive market produces too few positive externalities because the producer

• A) does not pay all the costs of the externalities.
• B) does not receive compensation for the externalities.
• C) Both A and B.
• D) None of the above.

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Definitions:

Foreign Bonds

Bonds issued in a domestic market by a foreign entity, denominated in the domestic market's currency as a form of investment.

United States

A country in North America, consisting of 50 states, known for its significant economic and political influence globally.

Currency

A system of money in general use in a particular country or economic context.

Floating Rate System

A currency exchange system where the value of a currency is allowed to fluctuate according to the foreign exchange market.