Which of the Following Statements Is TRUE

question 193

Multiple Choice

Which of the following statements is TRUE?
I. If an activity creates an external cost of $15, the government should subsidize the activity by $15.
II. Social surplus is maximized when the private marginal benefit equals the social cost.
III. External costs result in markets producing too much output.
IV. Someone pays external costs other than the producer or consumer.

• A) I and III only
• B) II, III, and IV only
• C) III only
• D) II and IV only

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Definitions:

Spirit of Revolution

The ideological and emotional fervor that drives revolutionary movements or periods of significant social and political change.

Quick Victory

Achieving success or a desired outcome in a short period of time, often used in military or competitive contexts.

Military Manpower

The number of people available for military service within a country, including both active duty personnel and individuals eligible to be called up as reserves.

Naval Power

The strength and capability of a country's navy, affecting its ability to control sea trade routes and exercise military influence.