An Externality Occurs When

question 127

Multiple Choice

An externality occurs when

• A) some of the costs of producing a good are paid by someone other than the producer.
• B) the costs of producing a good are paid entirely by the producer.
• C) the marginal social cost of an activity increases as that activity is increased.
• D) Both answers A and C are correct.

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Definitions:

Alertness

The state of being watchful and ready to respond quickly to any potential danger or opportunity.

Psychedelic Drugs

Consciousness-altering drugs that produce hallucinations, change thought processes, or disrupt the normal perception of time and space.

Disrupt

To cause disorder or turmoil in something, interrupting or preventing it from continuing as usual.

Thought Processes

The mental activities involved in understanding, processing, and communicating information.