Refer to the Above Supply and Demand Graph

question 130

Multiple Choice

Refer to the above supply and demand graph. In the graph, line S is the current supply of this product, while line S₁ is the optimal supply from the society's perspective. This figure suggests that there is (are) :

• A) External benefits from the production of this product
• B) External costs in the production of this product
• C) Currently an underallocation of resources toward producing this good
• D) Positive externalities from producing the good

---

Definitions:

Employer's Negligence

A legal concept where an employer fails to provide a safe working environment, leading to potential harm or injury to employees.

Law of Torts

The area of law that deals with civil wrongs, including negligence, intentional harm to persons or property, and liabilities for those actions.

Imperiled Person

An individual who is in a situation of great risk, danger, or jeopardy, often requiring urgent assistance or intervention.

Affirmative Action

A policy favoring those who tend to suffer from discrimination, especially in relation to employment or education.