A Negative Externality or External Cost Occurs When

question 63

Multiple Choice

A negative externality or external cost occurs when:

• A)firms fail to achieve allocative efficiency.
• B)firms fail to achieve productive efficiency.
• C)price exceeds marginal cost.
• D)the total cost of producing a good exceeds the costs borne by the producer.

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Definitions:

Reaction Range Model

A theory suggesting that genetics set a range for potential development, while the environment determines where within that range an individual falls.

Intellectually Enriched

Describes an environment or condition that stimulates cognitive growth and development through exposure to diverse and challenging materials and experiences.

Intensity

The magnitude or strength of a phenomenon, such as sound, light, or physical force, often described in terms of levels or degrees.

Pain

An unpleasant sensory and emotional experience associated with actual or potential tissue damage, or described in terms of such damage.