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:

Low Validity

refers to the situation where a test does not accurately measure what it is supposed to measure, indicating a weak relationship between test scores and the intended construct.

Item Characteristic Curve

A graphical representation that shows the probability of a respondent answering a test item correctly at different levels of ability.

Item Response Theory

A theory and related statistical models that estimate the probability of an individual responding to a specific item on a test, based on the item characteristics and the individual's latent trait level.

Rehabilitation Act

A U.S. federal law that prohibits discrimination on the basis of disability in programs conducted by federal agencies.