If a Good Is Produced by Firms That Generate External

question 18

Multiple Choice

If a good is produced by firms that generate external costs, the price consumers pay

• A) will be efficient as long as it equals the marginal costs of the firms.
• B) will be too low.
• C) will be too high because the consumers end up paying the costs instead of the firm.
• D) will be the correct price, but the quantity sold of the good will be too large.

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Definitions:

Misbehavior

Actions or conduct that are inappropriate or violate social norms or rules.

Delay

The act of postponing or making something happen later than originally planned.

Continuous Reinforcement

A method of learning that involves rewarding every correct response or behavior.

Acquiring Response

The process of learning a new behavior or response as a result of conditioning.