When a Benefit of an Action Falls on Other Than

question 36

Multiple Choice

When a benefit of an action falls on other than the person (or persons) responsible for the action,which of the following exists?

• A)Positive externality
• B)Negative externality
• C)Externality in consumption
• D)Externality in production
• E)External cost

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Definitions:

Comparative Advantage

The capacity for a person, company, or nation to generate a product or offer a service at a lesser opportunity cost compared to its rivals.

Opportunity Cost

The expense incurred by not choosing the second-best option available when a decision is made or an action is taken.

Pure Capitalism

An economic system characterized by private ownership of the means of production and where investments, distribution, income, production, and prices are determined by the market.

Owns No Resources

The condition of not having access to or control over any assets, capital, or means of production.