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Explain Why an External Cost Leads to an Over-Allocation of Resources

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Essay

Explain why an external cost leads to an over-allocation of resources to the production of a good.


Definitions:

Different Arousal Patterns

Variations in physiological or psychological activation among individuals or in response to different stimuli.

Elated

Characterized by a high level of happiness and exhilaration, often for a specific reason.

Triumph

The state of being victorious or successful, often after a struggle or competition.

Mood

A temporary state of mind or feeling that influences an individual's emotional state and perceptions.

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