If a Negative Externality Results from the Refining of Oil

question 104

Multiple Choice

If a negative externality results from the refining of oil, the cost of production as seen by the oil refinery:

• A)does not include the external cost.
• B)includes the external cost.
• C)does not include the external benefit.
• D)includes the external benefit.
• E)equals the social cost of oil refining.

---

Definitions:

Milgram's Obedience Study

An experiment conducted by Stanley Milgram in the 1960s to study the extent to which individuals would follow orders from an authority figure, even when those orders could harm another person.

Serious Harm

A significant or profound negative impact on an individual's physical, emotional, or psychological well-being.

Authority

A right or power assigned to an individual or organization to make decisions and enforce rules.

Confirmation Bias

Confirmation bias describes the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities.