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.

Understand the ethical considerations in psychological research, with a focus on studies involving animals.

Understand the fundamentals and historical perspectives of psychology, including its main schools of thought.

Recognize the contributions of key figures such as Carl Rogers and Abraham Maslow to the development of humanistic psychology.

Differentiate among the various specialties within applied psychology and their functions.

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Definitions:

Markup

The amount added to the cost price of goods to cover overhead and profit; the percentage increase on the original cost.

Selling Price

The final price at which a product or service is sold to the customer, taking into account costs, profit margins, and market demand.

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the financial health of a company's core activities.

List Price

The published price of a product or service, often suggested by the manufacturer or service provider, before any discounts or negotiations.