What Is an Externality

question 118

Multiple Choice

What is an externality?

• A)A benefit realised by the purchaser of a good or service.
• B)A cost paid for by the producer of a good or service.
• C)A benefit or cost experienced by someone who is not a producer or consumer of a good or service.
• D)Anything that is external or not relevant to the production of a good or service.

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Definitions:

Import Quota

A restriction by a country on the quantity of a good that can be imported over a given period.

Consumer Surplus

The difference in the amount consumers are prepared to pay versus what they actually pay for goods or services.

Trucks

Large motor vehicles designed for transporting goods by road.

Government Revenue

Income received by the government from taxes and other sources used to fund public services and projects.