When an External Cost Exists That Is NOT Taken into Account

question 223

Multiple Choice

When an external cost exists that is NOT taken into account in the production of a product,

• A) the level of output is too low, and the supply curve should shift to the right to account for the externality.
• B) the level of output is optimal, and there should be no change in the supply curve.
• C) the price of the product is too high, and production should be expanded to lower the price.
• D) the level of output is too high, and the supply curve should shift to the left to account for the externality.

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Definitions:

Inflammation

A biological response to injury or infection, characterized by redness, swelling, pain, and heat, serving as a protective mechanism to eliminate the initial cause of cell injury.

Embolus

An embolism can occur when a blood clot, air bubble, piece of fatty deposit, or another foreign object travels through the bloodstream and becomes lodged in a blood vessel.

Cerebral Artery

A Cerebral Artery is a blood vessel that supplies blood to the brain, helping deliver oxygen and nutrients critical for its function.

Aortic

Relating to the aorta, the largest artery in the body, which carries oxygenated blood from the heart to the rest of the body.