An Externality Occurs When

question 77

Multiple Choice

An externality occurs when:

• A)​people other than those making the demand and supply decisions share the benefits or the costs of an activity.
• B)​only the people making the demand and supply decisions share the benefits or the costs of an activity.
• C)​private costs of production equal the full social costs associated with production of a good.
• D)​private costs of production are ignored.

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Definitions:

Infant

An infant is a young child in the earliest stage of life, typically from birth to one year old.

Caregiver

An individual who provides care for another person, such as a child, elderly adult, or someone with a disability, either professionally or as a family member.

Sense of Moral Behavior

The inherent ability or developed understanding that guides an individual to differentiate right from wrong, guiding personal actions and interpersonal relationships.

Children Under One Year

Infants within their first year of life, focusing on stages of rapid growth and development.