The Graphs Below Refer to Two Separate Product Markets

question 25

Multiple Choice

The graphs below refer to two separate product markets.Assume that society's optimal level of output in each market is Q₀ and that government purposely shifts the market supply curve from S to S₁ in diagram (a) and from S to S₂ in diagram (b) .We can conclude that the government is correcting for:

• A) negative externalities in diagram (a)and positive externalities in diagram (b).
• B) positive externalities in diagram (a)and negative externalities in diagram (a).
• C) negative externalities in both diagrams.
• D) positive externalities in both diagrams.

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Definitions:

Blood Vessels

Tubular structures that carry blood throughout the body, including arteries, veins, and capillaries.

Control Headquarters

The central or main location from which control is exercised, especially in operations that require coordination such as emergency response, military, or corporate operations.

The Brain

The central organ of the nervous system, located in the skull, responsible for complex functions including thought, emotion, and coordination.

Visual Impulses

Electrical signals generated by the retina in response to light, which are transmitted to the brain for visual interpretation.