When Do Externalities Arise

question 79

Multiple Choice

When do externalities arise?

• A)When the explicit costs of producing a good or service are not borne by the producer
• B)When an economic activity imposes a burden on them who are not directly involved in it
• C)When the government produces such goods and services which are consumed by only a particular class of people
• D)When goods of mass consumption are not produced as they do not yield profit for the producers

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Definitions:

Construct Organization

In personal construct theory, this refers to the way in which individual personal constructs are arranged or ordered within a person's mind, affecting perception and behavior.

Personal Construct Theory

A psychological theory developed by George Kelly in 1955, proposing that individuals use personal constructs (mental models) to understand and interpret their experiences.

Sociality Corollary

A principle suggesting that the establishment and understanding of personal identity are significantly influenced by social relationships and interactions.

Individuality Corollary

A concept suggesting that individuals perceive events and entities in a unique manner based on their personal construct system.