Figure 10-13

question 181

Multiple Choice

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics.
-Refer to Figure 10-13. If 250 units of plastics are produced and consumed, then the

• A)social optimum has been reached.
• B)market equilibrium has been reached.
• C)negative externality associated with plastics has been eliminated.
• D)positive externality associated with plastics has been eliminated.

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Definitions:

Recessionary Gap

A situation where an economy's real GDP is lower than its potential GDP, leading to underutilized resources and higher unemployment.

Potential Output

The maximum amount of goods and services an economy can produce when it is using all of its resources efficiently.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable, often due to market failure or intervention.

Potential Level

The capacity of an economy to produce goods and services when at full employment, indicating the maximum sustainable output level.