Suppose That the Production of a Good Causes Negative Externalities

question 124

Multiple Choice

Suppose that the production of a good causes negative externalities. What will happen if the good is produced at the level at which the marginal private cost curve meets the demand curve?

• A)The level of output will be socially desirable.
• B)The level of output will result in a net social cost.
• C)There will be a surplus.
• D)The producers will incur losses.
• E)There will be no buyer in the market.

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Definitions:

Negative Explanatory Style

A cognitive approach where individuals habitually attribute negative events to internal, stable, and global factors.

State-Dependent Memory

The phenomenon where information learned in a particular state of mind (e.g., emotional, sober, intoxicated) is more easily recalled when in the same state.

Learned Helplessness

A situation where an individual experiences feelings of helplessness, resulting from experiencing a traumatic event or ongoing inability to achieve success.

Heritability

The proportion of variance in a population that can be attributed to genetic differences among individuals within that population.