When Negative Externalities Are Connected with the Production of a Good

question 117

Multiple Choice

When negative externalities are connected with the production of a good,

• A)market output will be greater than the socially optimal output.
• B)private costs and social costs are equal.
• C)the government should subsidize the production of the good.
• D)there will be a shortage of the good.

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Definitions:

Foreign Direct Investment

Investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Multinational Corporations

Large companies that operate and have assets in several countries, beyond their home country, to maximize global market presence.

National Labor Unions

Early labor organizations in various countries that sought to advocate for workers' rights and interests across multiple industries.

Government Regulations

Guidelines and rules established by governmental bodies designed to control and govern the practices and operations of various industries and sectors.