Which of the Following Describes How a Positive Externality Affects

question 132

Multiple Choice

Which of the following describes how a positive externality affects a competitive market?

• A)The externality causes a difference between the private benefit from consumption and the social benefit.
• B)The externality causes a difference between the private benefit from production and the social cost of production.
• C)The externality causes quantity demanded to exceed quantity supplied.
• D)The externality causes a difference between the social cost of production and the social cost of consumption.

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Definitions:

National Debt

The net accumulation of federal budget deficits.

Rate of Unemployment

The percentage of the labor force that is jobless and actively seeking employment.

Normative Economic Statement

A statement that reflects opinions or judgments about what ought to be in economics, focusing on the desirability of certain economic policies or outcomes.

Minimum Wage

The lowest legal wage that employers are allowed to pay their workers, set by law to ensure a minimum standard of living for employees.