When an External Cost Associated with the Production of Some

question 61

Multiple Choice

When an external cost associated with the production of some good has been internalized, it means that

• A) the consumer must bear the net social benefits imposed by the producer.
• B) the producer must bear the external costs imposed by production.
• C) the private cost of production is borne by the producer.
• D) the firm is ignoring social costs.
• E) the opportunity cost of production is passed on to the consumer.

Understand marginal utility and its application in consumer decision-making.

Recognize the role of R&D spending in generating technological advances.

Distinguish between different forms of technological advances (product innovation, process innovation) and their economic impacts.

Understand the mechanisms for protecting intellectual property and their role in encouraging innovation.

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Definitions:

Creates a Product

The process of designing, manufacturing, or crafting goods or services to be offered for sale or use.

Workforce

The collection of all employees or workers in a company, organization, or economy.

Decrease

A reduction in size, quantity, or degree.

Relationship Management

The strategy of maintaining a positive relationship with customers and other stakeholders to promote loyalty and long-term engagement.