An Externality Exists in the Production of a Good or Service

question 45

Multiple Choice

An externality exists in the production of a good or service when:

• A) the marginal cost to society of consuming an extra unit of a good equals the marginal social benefit.
• B) resources are allocated such that no one can be made better off without making someone
• C) the marginal social cost differs from the marginal private cost of production.
• D) markets are allocatively and productively efficient.

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Definitions:

Oral Activity

Activities involving the mouth, such as eating, drinking, or speaking, sometimes used in therapeutic settings to improve oral motor functions.

Late Infancy

The stage in a baby's development that typically ranges from 6 months to one year, focusing on rapid growth and motor milestones.

Toddlerhood

The developmental stage in children generally from ages 1 to 3 years, marked by rapid growth in mobility, language, and cognitive skills.

Designated Driver

A person chosen to refrain from drinking alcohol at a social event so they can drive others home safely.