When the Private Costs and the Social Costs Are NOT

question 155

Multiple Choice

When the private costs and the social costs are NOT the same, there is a(n)

• A) externality.
• B) internality.
• C) public good.
• D) monopoly.

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Definitions:

Changing Technology

The rapid evolution and adoption of new techniques, tools, and software which can disrupt industries and alter business operations.

Scrap

Material waste or remnants resulting from manufacturing processes, which may have a recoverable value or can sometimes be reused or recycled.

Inventory

The raw materials, work-in-progress products, and finished goods considered to be the portion of a business’s assets that are ready or will be ready for sale.

Irrelevant Costs

Costs that should not be considered in decision-making because they will not be affected by the decision.