When the Production of a Good Creates a Positive Externality

question 135

Multiple Choice

When the production of a good creates a positive externality,

• A) external costs will be present.
• B) market output will be less than the socially optimal output level.
• C) market output will be more than the socially optimal output level.
• D) marginal social cost exceeds marginal private cost at the market equilibrium quantity.
• E) private costs are equal to social costs.

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Definitions:

Favorable Treatment

The act of giving preferential consideration or benefits to a particular party or group.

Disparate-Treatment Discrimination

A form of discrimination where individuals are treated differently based on prohibited factors such as race, gender, age, or religion, in a way that is not justified by legitimate business needs.

Ethnicity

A category of identity based on common language, culture, ancestry, or social practices.

National Origin

Refers to the country where a person was born, or where their ancestors came from.