Markets Fail When Externalities Are Present

question 40

Multiple Choice

Markets fail when externalities are present

• A) because all of the costs and benefits of producing a good are reflected in the market price.
• B) because some of the costs and benefits of producing a good are not reflected in the market price.
• C) only if they are negative; positive externalities are not market failures.
• D) because profits are not maximized.
• E) if the positive externalities are less than the negative externalities.

---

Definitions:

Psychotherapist

A trained professional who utilizes psychological methods and techniques to help individuals understand and manage their emotions, behaviors, and thoughts.

Behaviour Therapy

A type of psychotherapy that aims to change undesirable behavior through conditioning and other learning principles.

Obsessive-Compulsive Disorder

A psychiatric condition defined by persistent, intrusive thoughts (obsessions) coupled with repeated actions (compulsions).

Therapeutic Outcomes

The results or consequences of medical treatments or therapeutic interventions, impacting patient health and well-being.