When a Divergence Between Social Costs and Private Costs Exists,then

question 62

Multiple Choice

When a divergence between social costs and private costs exists,then:

• A)markets will always provide an efficient allocation of resources.
• B)there will be too much or too little production and consumption in the market.
• C)there will be an acute shortage of goods and services in the market.
• D)there will be an excess demand for goods and services in the market.
• E)private costs must be greater than social costs.

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Definitions:

Law of Contracts

A set of laws that govern the formation, execution, and enforcement of agreements between parties.

Bilateral

Pertaining to or involving two sides, parties, or countries, often used in the context of agreements or contracts that require obligations from both parties.

Unilateral

A mistake that is the result of an error by one party about a material fact, that is, a fact that is important in the context of the particular contract.

Offeror

An entity or person who puts forth a proposal or bid for a contract, indicating a willingness to enter into an agreement under specified terms.