When There Is an Externality in a Market

question 214

Multiple Choice

When there is an externality in a market,

• A)the externality will move the market to an economically efficient equilibrium.
• B)the externality will cause the market price to be less than or greater than the equilibrium price.
• C)the government should use price controls to enable the market to reach equilibrium.
• D)government intervention may increase economic efficiency.

Understand the significance and limitations of concentration ratios and the Herfindahl-Hirschman index in measuring market competition.

Apply knowledge of oligopolies and their strategies to real-world economic situations.

Interpret the implications of oligopolistic behaviors for public policy and market regulation.

Understand the concept of the Herfindahl-Hirschman index and its implications for market structure.

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Definitions:

Fallopian Tube

One of two tubes through which eggs travel from the ovaries to the uterus in the female reproductive system.

Transvaginal Ultrasound

An imaging procedure using sound waves to look at a woman's reproductive organs, including the uterus, ovaries, and cervix, through the vagina.

Genital Warts

Small, fleshy growths on the genital or anal area caused by certain types of the human papillomavirus (HPV).

Human Papillomavirus

A group of viruses that can cause warts on various parts of the body, including the genitals, and is associated with certain types of cancers.