Externalities Are

question 6

Multiple Choice

Externalities are

• A)side effects passed on to a party other than the buyers and sellers in the market.
• B)side effects of government intervention in markets.
• C)external forces that cause the price of a good to be higher than it otherwise would be.
• D)external forces that help establish equilibrium price.

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Definitions:

Inflation Rate

The elevation in the percentage cost of goods and services across an economy over an established period.

Relative-price Variability

Fluctuations in the price of one good or service in relation to others, affecting purchasing decisions and economic equilibrium.

Inflation Rate

A measure of how quickly the cost of goods and services rises, thereby reducing the purchasing power.

Fixed Price

A pricing strategy where the selling price of a product or service is set and not subject to change based on market fluctuations or bargaining.