If the Market Price of a Good Does NOT Include

question 238

Multiple Choice

If the market price of a good does NOT include all of the costs and benefits that arise from the production or consumption of the good, then

• A) the market is perfectly competitive.
• B) an externality is present.
• C) society is consuming and producing the optimal amount of the good.
• D) resources are properly allocated.

---

Definitions:

Hispaniola

An island in the Caribbean Sea, divided into the sovereign states of Haiti and the Dominican Republic.

European Diseases

Infectious diseases brought to the Americas by European explorers and colonists that had devastating impacts on indigenous populations due to lack of prior exposure and immunity.

Gold and Silver

Precious metals that have been traditionally used as currency, in jewelry, and for industrial purposes due to their value and properties.

Inflation

A general increase in prices and fall in the purchasing value of money.