You Drive to Work Each Day

question 39

Multiple Choice

You drive to work each day.The best example of an internal cost is the:

• A) amount of pollution emitted by your car.
• B) congestion created by your car being on the road.
• C) amount the government paid to build the road.
• D) amount you pay to maintain your car.
• E) amount of money you save each day by avoiding the toll roads.

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Definitions:

Public Goods

Goods that are neither excludable nor rival in consumption, meaning anyone can use them, and one person's use does not diminish the ability of another to use it also.

Optimal Level

The most efficient, effective, or desirable point or state for a specific circumstance or variable.

Willingness to Pay

Willingness to pay represents the maximum amount an individual is prepared to spend to acquire a good or service.

Marginal Cost

The boost in total charges linked to the creation of one more unit of a product or service.