If Negative Externalities Are Created in the Production of a Good

question 58

Multiple Choice

If negative externalities are created in the production of a good, then society will:

• A)produce too much of the good since the marginal private cost to firms is less than the marginal social cost.
• B)produce too little of the good since the marginal private cost to firms is less than the marginal social cost.
• C)produce too much of the good since the marginal private cost to firms is greater than the marginal social cost.
• D)produce too little of the good since the marginal private cost to firms is greater than the marginal social cost.
• E)always produce the most efficient quantity of output.

---

Definitions:

Ethical Guidelines

Standards designed to guide behavior and decisions based on moral values and principles.

Canadian Researchers

Scientists based in Canada who contribute to various fields of study through experimentation, observation, and analysis.

Empirical Studies

Research based on observed and measured phenomena, aiming to generate knowledge through experience and experiments.

Psychology

The scientific study of the mind and behavior, encompassing various aspects of conscious and unconscious experience as well as thought and brain functions.