When There Is Market Failure Due to a Negative Externality

question 65

Multiple Choice

When there is market failure due to a negative externality:

• A) there are no ways of correcting it.
• B) setting the price of the good equals to its marginal social cost will solve it.
• C) the free market produces output at a too high price.
• D) externalities have been taken into account.

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Definitions:

Assimilation

The process by which individuals or groups adopt the culture, norms, and practices of another group, losing their original identity.

Devaluation of Credentials

The diminishing value of educational or professional qualifications due to oversupply or changes in job market demand.

Canadian Doctor

A medical professional licensed to practice medicine within Canada, often involved in providing healthcare and treatment to patients.

Ethnic Affiliation

A sense of connection or belonging to a group that shares common cultural, linguistic, or ancestral traits.