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:

Small Intestine

The part of the gastrointestinal tract between the stomach and large intestine that is responsible for most of the digestion and absorption of nutrients.

Stomach

The stomach is a muscular organ located on the left side of the upper abdomen, receiving food from the esophagus and initiating digestion by secreting acid and enzymes.

Large Intestine

The last part of the gastrointestinal tract, which absorbs water and salts, forming and storing feces for elimination.

Duodenum

The first part of the small intestine immediately beyond the stomach, key in digestion and absorption of nutrients.