Figure 4-15 Figure 4-15 Shows a Market with an Externality

question 101

Multiple Choice

Figure 4-15
Figure 4-15 shows a market with an externality. The current market equilibrium output of Q₁ is not the economically efficient output. The economically efficient output is Q₂.
-Refer to Figure 4-15.Suppose the current market equilibrium output of Q₁ is not the economically efficient output because of an externality.The economically efficient output is Q₂.In that case,the diagram shows

• A) the effect of a positive externality in the production of a good.
• B) the effect of a negative externality in the production of a good.
• C) the effect of an external cost imposed on a producer.
• D) the effect of an external benefit such as a subsidy granted to consumers of a good.

---

Definitions:

Sexual Activity

Behaviors that involve the expression of sexuality between individuals, including various forms of physical intimacy.

Actively Religious

Individuals who regularly participate in religious activities and incorporate their faith into daily life, often influencing their values and decisions.

Erectile Problems

Issues related to achieving or maintaining an erection sufficient for satisfactory sexual performance, medically recognized as erectile dysfunction.

Brain Activation

The increase in blood flow to different parts of the brain, indicating areas of heightened neural activity during various tasks.