If Production of an Item Results in Negative External Costs

question 160

Multiple Choice

If production of an item results in negative external costs, then

• A) the market price is below the socially preferred price that reflects the external costs.
• B) the market price is above the socially preferred price that reflects the external costs.
• C) market forces will always correct the problem.
• D) the market quantity is too low from society's point of view.

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Definitions:

Endoplasmic Reticulum

A membranous network within cells that is involved in protein and lipid synthesis, transport, and detoxification processes, existing in two forms: rough and smooth.

Calcium Ions

Positively charged calcium atoms (Ca2+) that play essential roles in biological processes like bone formation, muscle contraction, and blood clotting.

Signaling Pathway

Complex networks of molecules that transmit information from external stimuli to a cell's interior, triggering specific cellular responses.

Phosphodiesterase

An enzyme that plays a critical role in cellular signaling by breaking down phosphodiester bonds within cyclic nucleotides like cAMP and cGMP.