An Externality Arises When

question 45

Multiple Choice

An externality arises when:

• A)an economic good is produced by many firms.
• B)the actions of a decision maker affect other decision makers in a way not reflected in the market price.
• C)the actions of a decision maker do not affect other decision makers.
• D)the market equilibrium is inefficient.

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Definitions:

Bank Credit Cards

Financial instruments issued by banks allowing cardholders to borrow funds up to a pre-approved limit for purchases or cash advances.

Credit Card Expense

Costs incurred from using a credit card, including interest charges, annual fees, and transaction fees.

Sales

The total amount earned from selling goods or services before any costs or expenses are deducted.

Trade Discount

A reduction in the listed price of goods or services offered by sellers to buyers in the business-to-business market, often determined by quantity purchased or early payment.