When the Production or Consumption of a Good Involves an Externality

question 119

Multiple Choice

When the production or consumption of a good involves an externality:

• A)resources are necessarily overallocated to the good.
• B)resources are necessarily underallocated to the good.
• C)someone not involved in buying or selling the good is affected.
• D)the market will efficiently allocate resources to its production.
• E)none of the above will be true.

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Definitions:

Time Spans

The duration between the beginning and ending of an event or the period over which something exists or is effective.

Goals

Targets or objectives that an individual, group, or organization aim to achieve, often serving as a guide for actions and efforts.

Organizational Structure

The system that outlines how certain activities are directed to achieve the goals of an organization, including rules, roles, and responsibilities.

High Differentiation

A strategy or condition in which a company or organization develops a diversity of products, services, or roles to cater to various market needs or internal efficiencies.