Suppose That Flower Gardens Create a Positive Externality Equal to $1

question 190

Multiple Choice

Suppose that flower gardens create a positive externality equal to $1 per plant. What is the relationship between the equilibrium quantity and the socially optimal quantity of plants grown?

• A)They are equal.
• B)The equilibrium quantity is greater than the socially optimal quantity.
• C)The equilibrium quantity is less than the socially optimal quantity.
• D)There is not enough information to answer the question.

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Definitions:

Extracellular Anion

A negatively charged ion located outside the cell in the extracellular fluid, which helps maintain the cell's electrochemical gradient and osmotic pressure.

Sweat Production

The process by which the sweat glands produce sweat, a fluid consisting of water, salts, and other substances, to cool the body down.

Na+

Sodium ions, essential electrolytes in the body that play critical roles in fluid balance, nerve function, and muscle contractions.

Urine

A liquid by-product of metabolism in humans and many animals, which is excreted by the kidneys through the urinary system.