When the Free Market Produces Less Than the Socially Optimal

question 181

Multiple Choice

When the free market produces less than the socially optimal quantity of a good,

• A)negative externalities must be present
• B)marginal social cost must exceed marginal private cost
• C)marginal private benefit must exceed marginal social benefit
• D)the government should tax production of the good
• E)there has been a market failure

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Definitions:

Technological Innovations

The introduction of new technologies or methods that improve products, processes, or services, driving efficiency, enhancements, and competitive advantage.

Dominant View

The most widely accepted perspective or belief in a particular context or society.

Contested Phenomena

Topics or issues that are disputed and debated because they lack a universally accepted definition or viewpoint.

Technological Determinism

The theory that society's technology drives the development of its social structures and cultural values.