The Reason Externalities Distort the Allocation of Resources Is That

question 1

Multiple Choice

The reason externalities distort the allocation of resources is that

• A)too few goods are usually produced.
• B)firms often go out of business because of the externality.
• C)a firm's private costs do not reflect the social cost of production.
• D)regulating externalities uses scarce resources.

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Definitions:

Concern For Production

Focuses on the emphasis a manager or organization places on the output and productivity levels of its operations.

Readiness

The state of being fully prepared for something or willing to do something; readiness may refer to individuals, organizations, or systems.

Ability

The capacity of an individual to perform actions or tasks effectively, based on skills, talent, or knowledge.

Willingness

The quality or state of being prepared to do something; readiness.