If Production of an Item Results in Negative External Costs

question 160

Multiple Choice

If production of an item results in negative external costs, then

• A) the market price is below the socially preferred price that reflects the external costs.
• B) the market price is above the socially preferred price that reflects the external costs.
• C) market forces will always correct the problem.
• D) the market quantity is too low from society's point of view.

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Definitions:

Freshwater Ecosystems

Aquatic systems of low salt concentration, including rivers, lakes, streams, ponds, and wetlands, supporting diverse life forms.

Groundwater

The water present beneath Earth's surface in soil pore spaces and in the fractures of rock formations.

Plant Nutrients

Essential minerals and elements required by plants for their growth, development, and physiological processes.

Oxygen Replenish

The process of increasing the oxygen level in an environment, typically through natural processes like photosynthesis or through artificial means.