Figure 5-1 Shows a Market with an Externality

question 97

Multiple Choice

Figure 5-1 shows a market with an externality.The current market equilibrium output of Q1 is not the economically efficient output.The economically efficient output is Q2.
-Refer to Figure 5-1.Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality.The economically efficient output is Q2.In that case,the diagram shows

• A)the effect of a positive externality in the production of a good.
• B)the effect of a negative externality in the production of a good.
• C)the effect of an external cost imposed on a producer.
• D)the effect of an external benefit such as a subsidy granted to consumers of a good.

---

Definitions:

Conduct Disorder

A serious behavioral and emotional disorder in children and adolescents marked by a persistent pattern of violating the rights of others or major societal norms or rules.

Treatment

Interventions or procedures aimed at relieving or healing a disorder, disease, or medical condition.

Diagnostic Criteria

A set of guidelines used to determine the presence of a specific disorder or disease.

Attention-Deficit/Hyperactivity Disorder

A neurodevelopmental disorder characterized by a pattern of inattention, hyperactivity, and impulsivity that is more frequent and severe than typically observed in individuals at a comparable level of development.