Whether an Externality Is Positive or Negative, It Is Always

question 214

Multiple Choice

Whether an externality is positive or negative, it is always

• A) evaluated by the Supreme Court of the United States.
• B) evaluated by the government.
• C) evaluated by the impact on the third party.
• D) judged by the profitability of the firm producing the product.

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Definitions:

Marginal-Cost Curve

A graph that displays the cost of producing one additional unit of a good or service.

Average-Total-Cost Curve

A graph that displays the mean total cost of manufacturing across various output quantities, generally characterized by a U-shape because of the effects of economies and diseconomies of scale.

Long-Run Time Period

A duration in economics where all factors of production and costs are variable, allowing for complete adjustment.

Economies Of Scale

The economical benefits that businesses gain from their operation size, typically resulting in lower costs per unit of output as the scale expands.