Government Regulators Know That Pollution Is a Problem in Cleveland

question 7

Multiple Choice

Government regulators know that pollution is a problem in Cleveland.However,information on the social cost of this externality is difficult to come by.Which of the following statements best describes how this information problem might manifest itself?

• A)Well-intentioned regulators monitor a handful of polluting factors and are unable to determine how much they contribute to the problem.
• B)Well-intentioned regulators decide to shut down the plants and start government production in state-of-the-art factories.
• C)Well-intentioned regulators impose a collective tax that ends up reducing output beyond the optimal level of output.
• D)Well-intentioned regulators fail to do anything because they are afraid of doing the wrong thing.

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Definitions:

High Achievement Motivation

A psychological trait that drives individuals to pursue and meet high standards of accomplishment.

McClelland's Learned Needs

A theory suggesting that individuals’ specific needs are acquired over time and are shaped by one’s life experiences, focusing on the needs for achievement, affiliation, and power.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow in 1943, which posits that people are motivated by five basic categories of needs: physiological, safety, love/belonging, esteem, and self-actualization, addressed in ascending order.

Cultural Values

The collective principles, norms, and ideals that shape a society or organization's behavior and beliefs.