When the Production or Consumption of a Good Involves an Externality

question 119

Multiple Choice

When the production or consumption of a good involves an externality:

• A)resources are necessarily overallocated to the good.
• B)resources are necessarily underallocated to the good.
• C)someone not involved in buying or selling the good is affected.
• D)the market will efficiently allocate resources to its production.
• E)none of the above will be true.

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Definitions:

Persuasive Messages

Written or verbal communication intended to influence the attitudes, beliefs, or actions of others through logical or emotional appeals.

Psychographics

The study and classification of people according to their attitudes, aspirations, and other psychological criteria, often used in marketing.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, driven by the desire to fulfill a need or achieve a goal.

Demographics

Statistical data relating to the population and particular groups within it, often used for marketing, policy-making, and research purposes.