The Reason Externalities Distort the Allocation of Resources Is That

question 1

Multiple Choice

The reason externalities distort the allocation of resources is that

• A)too few goods are usually produced.
• B)firms often go out of business because of the externality.
• C)a firm's private costs do not reflect the social cost of production.
• D)regulating externalities uses scarce resources.

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Definitions:

Information-Processing Approach

An approach that focuses on the ways children process information about their world—how they manipulate information, monitor it, and create strategies to deal with it.

Researchers

Individuals who conduct systematic investigations to establish facts or principles or to collect information on a subject.

Metacognition

Cognition about cognition, or “knowing about knowing.”

Metacognitive Strategies

Techniques used to help an individual understand, control, and manipulate their own cognitive processes.