Which of the Following Statements Is True of External Costs

question 356

Multiple Choice

Which of the following statements is true of external costs?

• A) External costs should not be corrected since people will bear the costs whether they are corrected or not.
• B) There are no good ways to correct for the external costs.
• C) When external costs exist, the price of the good will be deceptively low leading to an overallocation of resources.
• D) External costs should only be corrected for if the correction will not increase the market price.

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Definitions:

Social Citizenship

The rights and obligations of citizens in a society, particularly concerning social welfare and participation in the social life of the community.

Civil Citizenship

The status and rights accorded to an individual within a state, including civil liberties, political rights, and the obligation to follow the law.

Economic Citizenship

A concept related to how citizens engage with the economic system of their country, including the rights and responsibilities that come with this engagement.

Political Citizenship

The status of being a member of a state or nation, including the rights, duties, and privileges associated with that membership.