If a Transaction Imposes External Costs,then

question 261

Multiple Choice

If a transaction imposes external costs,then:

• A) too much is being produced relative to the socially optimal amount.
• B) production should be increased to generate enough profits to cover those costs.
• C) all production of the good or service should cease.
• D) the market produces the socially optimal amount of goods.

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Definitions:

Particular Purpose

Refers specifically to the intended use or requirement for which something is sought or required, often in a legal or contractual context.

Matter of Law

Issues decided by a judge rather than by a jury, pertaining to legal interpretation rather than factual determination.

Transfer Title

The act of legally changing the ownership of a property or asset from one entity to another.

Common Law

A body of legal rules that have been made by judges as they issue rulings on cases, as opposed to laws made by legislatures or in official statutes.