When a Market Is Characterized by an Externality, the Government

question 392

Multiple Choice

When a market is characterized by an externality, the government

• A)can correct the market failure only in the case of positive externalities.
• B)can correct the market failure only in the case of negative externalities.
• C)can correct the market failure in the case of both positive and negative externalities by inducing market participants to internalize the externality.
• D)cannot correct for externalities due to the existence of patents.

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Definitions:

Ionotropic Receptors

A type of neurotransmitter receptor that forms an ion channel pore, which opens to allow ions to pass through the cell membrane in response to the binding of a neurotransmitter.

Metabotropic Receptors

A type of G-protein coupled receptor found in cells that interacts with neurotransmitters to produce longer-lasting effects through a series of biochemical reactions.

Ion Diffusion

The movement of ions from an area of higher concentration to an area of lower concentration across a permeable barrier.

Peptide Transmitters

Neurotransmitters made up of short chains of amino acids that modulate various physiological processes and neural communication.