When the Social Cost of an Externality Is Lower Than

question 61

Multiple Choice

When the social cost of an externality is lower than its private cost:

• A)society is likely to benefit from a corrective tax
• B)the externality is a positive one and society will not consume enough of the good
• C)the externality is a positive one and society will consume too much of the good
• D)society will benefit from the introduction of tradeable permits for production of the good

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Definitions:

Mix Of Operations

The combination of different processes, activities, and tasks used by an organization to produce goods or provide services.

Restructuring

The process of significantly modifying the organizational, operational, or financial structure of a company to improve its efficiency and effectiveness.

Liquidation

is the process of bringing a business to an end and distributing its assets to claimants, often resulting from bankruptcy.

Divestiture

The process of selling off a business division, investment, or asset by a company, often as a strategy to focus on core operations, cut losses, or raise capital.