When Does an Externality Occur

question 54

Multiple Choice

When does an externality occur?

• A) when only the people making the demand and supply decisions share the benefits or the costs of an activity
• B) when private costs of production are ignored
• C) when private costs of production equal the full social costs associated with production of a good
• D) when people other than those making the demand and supply decisions share the benefits or the costs of an activity

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Definitions:

Foster Home

A household that provides temporary care for children whose biological parents are unable to care for them.

Calm Manner

Exhibiting a peaceful, serene, or composed behavior, often in situations that may provoke stress or agitation.

Tyramine-free Diet

A nutritional regimen that avoids foods high in tyramine to prevent adverse reactions, often recommended for individuals taking certain medications like MAO inhibitors.

Alprazolam (Xanax)

A medication primarily used for the treatment of anxiety and panic disorders, belonging to the class of drugs known as benzodiazepines.