The Similarity Between Markets for Common Resources and Markets with Externalities

question 7

Multiple Choice

The similarity between markets for common resources and markets with externalities is that:

• A)the price that competitive firms charge does not capture the true costs and benefits of consumption.
• B)the equilibrium quantity is too high in terms of society.
• C)government involvement is needed to reach an efficient outcome.
• D)All of these statements are true.

---

Definitions:

Technological Revolution

A significant period of technological change and innovation that transforms industries, societies, and economies.

Mass Media

Encompasses various forms of communication, such as television, radio, newspapers, and the internet, that reach a large audience simultaneously.

Printing Press

A mechanical device invented in the 15th century by Johannes Gutenberg, which allowed for the mass production of printed materials, revolutionizing the spread of knowledge.

Johannes Gutenberg

A German inventor and printer who introduced printing to Europe with his mechanical movable-type printing technology.