Which of the Following Are True

question 97

Multiple Choice

Which of the following are true?

• A)​Negative externalities are real costs, but, unlike the other resources a firm uses in production, no one owns the air, so a firm does not have to pay for its use.
• B)​In the case of external costs, firms tend to produce too much from society's standpoint, causing an efficiency loss due to an overallocation of scarce resources to the production of the good.
• C)​If government could impose a pollution tax equal to the exact size of the external costs imposed by a firm, then the firm would produce at the socially desired level of output.
• D)​All of the above are true.

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Definitions:

Modality Specific

Pertaining to or affecting a particular mode of sensation or a specific sensory system.

Echoic Memory

A component of sensory memory that stores audio information, making it available for further processing for a brief period after the original sound has ceased.

Icon

A symbol, image, or figure that represents a concept, object, or entity, often recognized universally.

Primacy Effect

The improvement in retention of information learned at the beginning of a task.