Private Markets Fail to Reach a Socially Optimal Equilibrium When

question 311

Multiple Choice

Private markets fail to reach a socially optimal equilibrium when negative externalities are present because

• A)social costs equal private costs at the private market solution.
• B)private costs exceed social costs at the private market solution.
• C)social costs exceed private costs at the private market solution.
• D)they internalize externalities.

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Definitions:

Civil Rights Act of 1964

A landmark piece of legislation in the United States that outlawed discrimination based on race, color, religion, sex, or national origin.

Barry Goldwater

An American politician and a five-term U.S. Senator from Arizona known for his conservative political stance and his 1964 candidacy for President.

Watts Race Riot

A violent disturbance that took place in the Watts neighborhood of Los Angeles in 1965, illustrating tensions between African American residents and the police.

Lack of Opportunity

A situation where individuals or groups have limited options or chances for advancement and success.