An Externality

question 258

Multiple Choice

An externality

• A)results in an equilibrium that does not maximize the total benefits to society.
• B)causes demand to exceed supply.
• C)strengthens the role of the "invisible hand" in the marketplace.
• D)affects buyers but not sellers.

---

Definitions:

Consumer Goods

Products and services that are purchased by individuals for personal or household use, rather than for manufacturing or reselling.

Progressive-Era Union

Labor unions during the Progressive Era aimed at improving working conditions, increasing wages, and reducing working hours for the labor force in the early 20th century.

Higher Wages

An increase in the amount of money paid to workers per unit of time, often seen as a way to improve living standards and stimulate economic growth.

Gilded Age

A period in the late 19th century known for the transformation of the United States through industrialization, urbanization, and the rise of big business, alongside stark social inequalities.