If a Good Has an External Cost, the

question 152

Multiple Choice

If a good has an external cost, the

• A) competitive market outcome is efficient.
• B) marginal private cost reflects the external cost.
• C) competitive market outcome is inefficient.
• D) marginal private benefit is equal to the marginal social cost.

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Definitions:

Bankruptcy Court

A federal court that handles legal proceedings related to bankruptcy filings, allowing individuals or entities to settle debts under the protection of the law.

Bankruptcy Judges

Judicial officers specialized in handling bankruptcy cases, with the authority to make legal judgments and decisions regarding bankruptcy filings.

Chapter 7

A section of U.S. bankruptcy law under which a debtor's assets are liquidated and proceeds distributed to creditors.

Unsecured Creditor

A creditor that extends credit without requiring specific collateral, bearing higher risk if the borrower defaults.