The Third-Party Problem

question 157

Multiple Choice

The third-party problem

• A) occurs when a market activity leads to a negative externality.
• B) occurs when a market activity leads to a positive externality.
• C) occurs when a market activity leads to a negative or a positive externality.
• D) is the same as the free-rider problem.
• E) is associated with the production of private goods but not public goods.

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Definitions:

GAD

Generalized Anxiety Disorder, characterized by persistent and excessive worry about a number of different things.

Physiological Arousal

The body's response to external stimuli, resulting in physical and psychological reactions, such as increased heart rate and heightened alertness.

Worrying

The mental process of thinking about problems or unpleasant things that might happen in a way that makes you feel unhappy and frightened.

Bullied

The experience of being intimidated, harassed, or mistreated, typically by someone who is perceived to be more powerful.