An Externality Occurs When

question 12

Multiple Choice

An externality occurs when

• A) the costs of producing a good are paid entirely by the producer.
• B) some of the costs of producing a good are paid by someone other than the producer.
• C) the marginal social cost of an activity increases as that activity is increased.
• D) Both answers A and C are correct.

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Definitions:

Barrier Method

A type of contraception that physically blocks sperm from entering the uterus, examples include condoms, diaphragms, and cervical caps.

Hormonal Method

A contraception method that involves the use of hormones to prevent pregnancy.

Oral Contraceptive

A pill taken by mouth to prevent pregnancy, containing hormones that inhibit ovulation, fertilization, or implantation.

Hormonal Cycles

The natural fluctuation of hormones within the body, affecting various biological systems and processes, such as the menstrual cycle.