When the Consumption of a Good or Service Imposes Costs

question 145

Multiple Choice

When the consumption of a good or service imposes costs to society that are not reflected in the market price of the good,_____

• A)a negative externality arises.
• B)it implies that a renewable resource has been used in the production of the good.
• C)a positive externality arises.
• D)it implies that the good is a public good.
• E)it implies that a nonrenewable resource has been used in the production of the good.

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Definitions:

Supply

The overall quantity of a particular product or service that is accessible to buyers.

Demand

The desire and ability of consumers to purchase a good or service at a given price.

Price

The amount of money required to purchase a good, service, or resource.

Quantity

Quantity refers to the amount or number of units of a product or service available or demanded in the market.