When External Benefits Are Present in a Market

question 34

Multiple Choice

When external benefits are present in a market:

• A) the market is more efficient than if the externalities were not present.
• B) the market outcome is inefficient.
• C) overall social surplus is maximized because others are gaining in addition to the market consumers.
• D) the external benefit must be offset by an external cost.

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Definitions:

Assignment

The process of transferring responsibilities, properties, or legal rights between parties.

Delegation

The act of transferring authority and responsibility from one person or entity to another, often within an organizational context.

Lawsuit

A legal action or proceeding brought by one party against another in a court of law, often to obtain a remedy or enforce rights.

Book

A written or printed work consisting of pages glued or sewn together along one side and bound in covers.