In the Presence of a Negative Externality

question 21

Multiple Choice

In the presence of a negative externality

• A) there is an overallocation of resources to production
• B) the competitive equilibrium will not achieve an allocatively efficient solution
• C) MSC exceeds MSB at the competitive output level
• D) all of the above
• E) (a) and (b) only

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Definitions:

Legumes

A group of plants, including beans, peas, and lentils, that have the ability to fix nitrogen from the air into the soil, improving soil fertility.

Dry Fruit

a type of fruit where the outer layer becomes hard at maturity, protecting the seeds inside without using fleshy tissue.

Ovary

A female reproductive organ in animals and plants where ova or eggs are produced.

Carpels

The female reproductive organs of a flower, consisting of the stigma, style, and ovary.