An External Cost Occurs When

question 25

Multiple Choice

An external cost occurs when

• A)some of the benefits derived from the production or consumption of some good or service are enjoyed by a third party.
• B)the production or consumption of some good or service inflicts costs on a third party without compensation.
• C)private costs exceed social costs.
• D)private costs exceed private benefits.

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Definitions:

Interpretation

The act of explaining or determining the meaning of something, often relating to text, speech, signs, or actions.

Ombudsman

An independent official appointed to investigate individuals' complaints against maladministration, especially that of public authorities.

Workplace Disputes

Conflicts that arise in the workplace over issues such as working conditions, employee rights, and management practices.

Determination

The resolve or firmness of purpose someone has in pursuing a goal, often in the face of adversity.