Which of the Following Statements About Internalising a Negative Production

question 147

Multiple Choice

Which of the following statements about internalising a negative production externality is most correct?

• A) internalising a negative production externality will cause an industry to decrease the quantity it supplies to the market and decrease the price of the good produced
• B) internalising a negative production externality will cause an industry to decrease the quantity it supplies to the market and increase the price of the good produced
• C) internalising a negative production externality will cause an industry to increase the quantity it supplies to the market and decrease the price of the good produced
• D) internalising a negative production externality will cause an industry to increase the quantity it supplies to the market and increase the price of the good produced

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Definitions:

Budget Line

A graphical representation showing all possible combinations of two goods that can be purchased with a given budget at fixed prices.

Money Income

The total amount of monetary earnings received by an individual or household over a specific time period.

Purposeful Behavior

Actions taken with a specific goal in mind, driven by intentions and often linked to rational decision-making.

Production Possibilities Curve

A graphical representation showing the maximum number of goods or services that can be produced with a given set of resources and technology.