The Basic Reason That a Competitive Unregulated Market Produces an Inefficient

question 12

Multiple Choice

The basic reason that a competitive unregulated market produces an inefficient amount of a good with an external cost is because

• A) producers cannot measure marginal social cost.
• B) producers do not pay the external cost.
• C) the general public does not care about external costs.
• D) external costs are not a political issue.
• E) the external cost is paid by consumers rather than producers.

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Definitions:

Performance Goal

An objective centered around achieving a specific standard of proficiency on a task, often within a predetermined time frame.

Avoiding Criticism

A behavior or strategy aimed at preventing or minimizing negative feedback or judgment from others.

Risky Sexual Behaviors

Actions that increase the likelihood of contracting sexually transmitted infections and/or lead to unintended pregnancies, often due to lack of protection or informed consent.

Extrinsic Motives

Motivation that is driven by external rewards such as money, fame, grades, and praise.