When a Good Causes Positive External Benefits to Accrue to Third

question 110

Multiple Choice

When a good causes positive external benefits to accrue to third parties, an unfettered market will

• A) under-allocate resources to the good causing the benefit.
• B) over-allocate resources to the good causing the benefit.
• C) cause the equilibrium quantity, established before the benefit is taken into account, to be produced more efficiently.
• D) eliminate such goods.

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Definitions:

Pupils

The black circular openings in the center of the iris of the eye, which regulate the amount of light that enters the eye.

Blurry Vision

A lack of sharpness in vision, resulting in the inability to see fine details.

Colour Vision

The capability of the visual system to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.

Vision Clarity

The sharpness and clearness of vision, often measured by the ability to discern letters or numbers at a specified distance.