The Presence of Negative Externalities Leads to a Misallocation of Societal

question 158

Multiple Choice

The presence of negative externalities leads to a misallocation of societal resources because:

• A)​whenever external costs are imposed on outside parties, the good should not be produced at all.
• B)​less of the good than is ideal for society is produced.
• C)​there are some costs associated with production that the producer fails to take into consideration.
• D)​the government always intervenes in markets when negative externalities are present, and the government is inherently inefficient.

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Definitions:

Cochlea

A spiral-shaped, fluid-filled inner ear structure that is essential for translating sound into nerve impulses sent to the brain.

Nerve Impulses

Electrical signals that are transmitted along neurons, enabling communication within the nervous system.

Fluid-Filled Tube

A tube that contains a liquid which can be used in various mechanical or biological systems.

Hearing Loss

A partial or total inability to hear sound in one or both ears.