If a Good That Generates Negative Externalities Were Priced to Take

question 147

Multiple Choice

If a good that generates negative externalities were priced to take these negative externalities into account, then its:

• A) Price would decrease and its output would increase
• B) Output would increase but its price would remain constant
• C) Price would increase and its output would decrease
• D) Price would increase but its output would remain constant

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Definitions:

Egas Moniz

A Portuguese neurologist best known for pioneering the development of cerebral angiography and the controversial prefrontal leucotomy.

Anxiety Disorder

A disorder that includes a number of conditions in which unhelpful anxiety has a negative effect on daily life.

Phobias

Intense, irrational fears of specific objects or situations, which can trigger severe anxiety and avoidance behavior disproportionate to the actual threat posed.

Generalized Anxiety Disorder

Persistently high levels of anxiety often accompanied by maladaptive behaviors to reduce anxiety; thought to be caused by chronic stress.