When the Production of a Good Creates External Costs

question 57

Multiple Choice

When the production of a good creates external costs,

• A)Profits for the producer of the good will be lower.
• B)Production of the good will be lower.
• C)Society's collective well-being will be lower.
• D)The level of environmental pollution will be lower.

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Definitions:

Kilometres

A unit of length in the metric system equal to 1,000 meters, commonly used to measure distances between places.

Harmonized Sales Tax

A combined tax that includes both federal and provincial sales taxes, applied to the purchase of goods and services.

Price Tags

Labels or stickers on merchandise displaying the price of the item.

Implied Value

The estimated value of an asset or company after considering factors not directly stated but suggested by available information.