If There Are External Costs in Production and Firms Do

question 146

Multiple Choice

If there are external costs in production and firms do not have to account for these costs, then firms will produce

• A) at the efficient level.
• B) an output level that is below the efficient level.
• C) an output level that is above the efficient level.
• D) an output level that is either above or below the efficient level.

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Definitions:

Unfriendly

Characterized by a lack of friendliness or warmth; often describes behavior that is cold, distant, or hostile.

Embarrassed

A feeling of discomfort or self-consciousness caused by a perceived mistake or inadequacy in front of others.

Scapegoat Theory

A social psychology concept explaining that individuals or groups are unfairly blamed for problems or negative outcomes, often to divert attention from the true causes.

Group

An ensemble of persons who engage in interaction, have alike features, and as a whole experience a sense of cohesion or identity.