An Externality Occurs When

question 78

Multiple Choice

An externality occurs when:

• A)people other than those making the demand and the supply decisions share the benefits or the costs of an activity.
• B)people enjoy the benefits of a good or a service without paying for it.
• C)the private cost of production equals the social cost associated with the production of a good.
• D)a firm is unable to lower its average cost of production by expanding its output level.
• E)the government intervenes in the production and the distribution of a good and does not allow the market forces to perform efficiently.

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Definitions:

T-Distribution

Is a type of probability distribution that is symmetric and bell-shaped, used in statistics when the sample size is small and the population standard deviation is unknown.

Degrees Of Freedom

The number of values in a calculation that are free to vary without violating any constraints, used to determine the shape of various statistical distributions.

Sample Mean

The mean of a dataset, found by adding up all the values and then dividing the total by the count of values in the set.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, showing how much the values differ from the mean.