No Externalities Exist When

question 50

Multiple Choice

No externalities exist when:

• A) private costs exceed social costs.
• B) private costs and benefits equal social costs and benefits.
• C) private benefits are less than social benefits.
• D) private benefits exceed social benefits.

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Definitions:

Supply Function

Represents the relationship between the quantity of a good that producers are willing to sell and the price of the good.

Quantity Supplied

The amount of a particular good or service that suppliers are willing and able to provide at a given price during a certain period.

Demand Function

A mathematical expression showing the relationship between the quantity demanded of a good and its price, holding other factors constant.

Supply Function

A numerical model illustrating how the amount of a product provided is related to its cost.