A Commonality Between Externalities and Public Goods Is That

question 8

Multiple Choice

A commonality between externalities and public goods is that:

• A)in each case, markets are not likely to allocate resources efficiently, even though they might otherwise be competitive.
• B)in each case, government agency intervention would create inefficiency compared to the market solution.
• C)competitive markets are likely to be efficient in each case.
• D)the invisible hand (as discussed by Adam Smith)is likely to lead to efficiency in each case.

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Definitions:

Administrative Expenses

The costs associated with the general administration and management of a business, including salaries of executives, office supplies, and utilities.

Outsourcing

The business practice of hiring a party outside a company to perform services and create goods traditionally performed in-house by the company's own employees.

Phased-Retirement Program

A type of retirement plan that allows employees to gradually reduce their working hours as they transition to full retirement, often while retaining some benefits.

Early Retirement Incentives

Offers made to employees to encourage them to retire earlier than the norm, often as a strategy to downsize the workforce cost-effectively.