Positive Externalities Arise When

question 320

Multiple Choice

Positive externalities arise when

• A) an unprofitable firm is shut down.
• B) a profitable firm is regulated.
• C) tax rates are reduced.
• D) production of a good generates benefits that spill over to third parties.

---

Definitions:

Minimum-wage Laws

Regulations establishing the lowest wage that employers can legally pay their workers.

Unemployment

A situation where individuals who are capable of working and willing to work cannot find employment.

Cartel

A group of firms acting in unison

Market Power

The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices.