If the Production of a Good Generates a Positive Externality

question 64

Multiple Choice

If the production of a good generates a positive externality, then:

• A)production of the good is harmful.
• B)there will be deadweight loss at the market equilibrium quantity.
• C)total economic surplus will be maximized at the market equilibrium quantity.
• D)the government should tax producers of the good.

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Definitions:

E-to-P Expectancy

The belief that one's effort (E) will lead to a particular level of performance (P).

Self-confidence

The belief in one's abilities, qualities, and judgment, contributing to an individual's self-assuredness and ability to face challenges.

Four-drive Theory

A model that identifies four basic motivational drives—the drive to acquire, bond, comprehend, and defend—that influence human behavior.

Hierarchy Of Needs

A motivational theory in psychology proposed by Abraham Maslow, which is often depicted as a pyramid with five levels of basic human needs, from physiological to self-actualization.