When Production Generates a Negative Externality, the True Cost of Production

question 113

Multiple Choice

When production generates a negative externality, the true cost of production is the

• A)private cost of production.
• B)public cost of production.
• C)social cost of production.
• D)average cost of production.

---

Definitions:

Legal Taxable Entity

An organization or individual that is recognized by law as a separate legal entity for tax purposes.

Shares Of Stock

Representations of ownership in a corporation, each of which entitles the shareholder to a fraction of the company's assets and profits, depending on the amount of shares owned.

Corporation

A legal entity separate from its shareholders, with its own rights, privileges, and liabilities.

Business Entity

An organization established as a separate legal entity for business purposes, which may include corporations, partnerships, and sole proprietorships.