Which of the Following Is an Example of an External

question 6

Multiple Choice

Which of the following is an example of an external cost?

• A) Unemployment.
• B) Unfair pricing behavior by a monopoly.
• C) Automobile exhaust fumes.
• D) Poverty.

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Definitions:

Production Possibility Frontier

A curve depicting the maximum attainable combinations of two products that may be produced with available resources and current technology.

Inefficiency

A situation where resources are not used in the best possible way, often leading to waste and a lower output than could be achieved.

Trade

The exchange of goods, services, or both between two or more parties.

Factors of Production

The assets employed to produce goods and services, encompassing land, labor, capital, and entrepreneurship.