The Optimal Reduction of an Externality Occurs When

question 34

Multiple Choice

The optimal reduction of an externality occurs when:

• A)society's marginal cost of reducing that externality is greater than its marginal benefit.
• B)public agencies could make a great deal of money.
• C)society's marginal cost and marginal benefit of reducing that externality are equal.
• D)society's marginal benefit of reducing that externality is greater than its marginal cost.

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Definitions:

Express Contract

A contract in which terms are explicitly stated and agreed upon by the parties, either orally or in writing.

Mutual Agreement

A common understanding or an arrangement that is accepted by all parties to a transaction or contract.

Mixed Goods-Services

Mixed goods-services refer to transactions that involve a combination of tangible products and intangible services in a single offering to consumers.

Federal Government

is the national government of a federal state, which holds the authority over the entire nation, distinct from state or local governments.