If We Know That the Demand Curve for Good X

question 317

Multiple Choice

If we know that the demand curve for good x fails to reflect the total value to society of that good, then we know that

• A)the market for good x is characterized by an externality, but we cannot determine whether the externality is positive or negative from this fact alone.
• B)the market for good x is characterized by a positive externality.
• C)the market for good x is characterized by a negative externality.
• D)the supply curve for good x fails to reflect the cost to society of producing that good.

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Definitions:

Specific Phobia

An intense, irrational fear of or aversion to a particular object, situation, or activity that is not harmful under normal circumstances.

Dutch

Refers to anything related to the Netherlands, its people, language, or culture.

Phobia

An anxiety disorder marked by a persistent, irrational fear and avoidance of a specific object, activity, or situation.

Panic Disorder

An anxiety disorder marked by unpredictable, minutes-long episodes of intense dread in which a person may experience terror and accompanying chest pain, choking, or other frightening sensations; often followed by worry over a possible next attack.