Which step is omitted from the three-step recipe used to analyze externalities in Table 2? (Note: The steps are not necessarily in order.)
$$\begin{array} { | l | }
\hline \text { Table 2: Steps in the Three-Step Recipe to Analyze Externalities } \
\hline \text { Assess the externalities. } \
\hline \text { Predict the equilibrium outcome. } \
\hline
\end{array}$$

Question

Which step is omitted from the three-step recipe used to analyze externalities in Table 2? (Note: The steps are not necessarily in order.)
$$\begin{array} { | l | } 
\hline \text { Table 2: Steps in the Three-Step Recipe to Analyze Externalities } \
\hline \text { Assess the externalities. } \
\hline \text { Predict the equilibrium outcome. } \
\hline
\end{array}$$

Quizplus · Accepted Answer

The correct step omitted is "Find the socially optimal outcome." This is because analyzing externalities typically involves assessing the externalities, predicting the equilibrium outcome, and then determining what the socially optimal outcome would be to compare and address the discrepancies caused by the externalities.

Which Step Is Omitted from the Three-Step Recipe Used to Analyze