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A Shift from S1 to S2 Reflects the Change That

Question 349

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A shift from S<sub>1</sub> to S<sub>2</sub> reflects the change that happens when a negative externality is taken into account. A shift from D<sub>1</sub> to D<sub>2</sub> reflects the change that happens when a positive externality is taken into account. -Refer to above figures. Prior to the shift of the curves, which panel and which curve involve the existence of negative externality? A) Panel 1 and S<sub>1</sub> B) Panel 1 and S<sub>2 </sub> C) Panel 2 and D<sub>1</sub> D) Panel 2 and D<sub>2</sub> A shift from S1 to S2 reflects the change that happens when a negative externality is taken into account. A shift from D1 to D2 reflects the change that happens when a positive externality is taken into account.
-Refer to above figures. Prior to the shift of the curves, which panel and which curve involve the existence of negative externality?


A) Panel 1 and S1
B) Panel 1 and S2
C) Panel 2 and D1
D) Panel 2 and D2

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