Which of the Following Is an Example of an External

question 147

Multiple Choice

Which of the following is an example of an external benefit?

• A) More people start to ride the bus because they become more public‐spirited and, as a result, air pollution is reduced.
• B) Firms are able to reduce their costs of production by using a more efficient technology.
• C) The federal government spends a million dollars on improving national parks.
• D) A firm has just gotten permission to open a landfill on property that is adjacent to your home.

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Definitions:

Construct Validity

The degree to which a test or instrument measures the theoretical construct or psychological concept it claims to measure.

Predictive Validity

The extent to which a test score or measure can accurately predict future performance or behaviors in specific areas.

Moral Development

The process through which individuals evolve their understanding of what is right and wrong, greatly influenced by personal experiences and cultural context.

Basic Framework

The underlying structure or set of ideas that forms the basis or foundation for something, such as a theory, system, or organization.