Which One of the Following Is Correct of Externalities

question 9

Multiple Choice

Which one of the following is correct of externalities?

• A)The existence of negative externality leads to the outcome that too little of the good will be produced.
• B)Externalities lead to an efficient outcome.
• C)The existence of positive externality leads to the outcome that too much of the good will be produced.
• D)Externalities occur when a decision creates costs or benefits for actors other than the one making the decision.
• E)Externalities only affect those who produce them.

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Definitions:

Static

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