When External Costs Are Present

question 255

Multiple Choice

When external costs are present

• A) competitive, unregulated markets are efficient.
• B) transaction costs will be high.
• C) a tax might be able to create efficiency.
• D) property rights have already been established.

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Definitions:

Senior-Citizen Discounts

Reduced prices offered to elderly individuals, typically those aged 65 and over, as a benefit for their age.

Cash Rebates

Refunds offered to consumers as an incentive to purchase a product or service.

Inelastic Supply

Characterizes a situation where the quantity supplied of a good is not significantly changed by the price of that good.

Antiques

Objects of considerable age valued for their artistic, historical, or collectible qualities.