When External Costs Exist

question 81

Multiple Choice

When external costs exist,

• A)There is government failure.
• B)Market prices do not convey the full costs of production.
• C)The market achieves the optimal mix of output.
• D)Private costs are greater than social costs.

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Definitions:

Unemployment

The condition where people who have the ability to work and are actively looking for jobs cannot secure employment.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances in bank accounts.

Economic Pie

A metaphor for the total amount of wealth or resources available in an economy that can be distributed among its participants.

Standard of Living

The extent of financial status, comfortability, worldly possessions, and essentials provided to a certain community class or area.