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:

Grouping

The act of classifying or organizing objects, individuals, or concepts into categories based on shared characteristics or criteria.

Rank Order

A method of arranging items in sequential order based on some criterion, often used in assessments to prioritize or sort data.

Psychodynamic

A psychological perspective that emphasizes the influence of unconscious processes and childhood experiences in shaping behavior and personality.

Counseling

A professional service that offers guidance and assistance to individuals dealing with personal, social, or psychological issues.