The Existence of Externalities in a Market Implies That

question 106

Multiple Choice

The existence of externalities in a market implies that:

• A)resources are being used efficiently.
• B)there is no other allocation of resources that would make society as a whole better off.
• C)consumers cannot be excluded from consuming the good once it is provided.
• D)resources are not being used in their highest valued activity.
• E)the societal welfare as a whole is maximized.

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