Private Costs

question 207

Multiple Choice

Private costs

• A)are borne by producers of a good while social costs are borne by government.
• B)are borne by consumers of a good while social costs are borne by government.
• C)are borne by producers of a good while social costs are borne by society at large.
• D)are borne by producers of a good while social costs are borne by those who cannot afford to purchase the good.

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Definitions:

Minimum Wages

The lowest legal hourly pay that workers can be paid, set by government legislation.

Equilibrium Wage

The wage rate at which the quantity of labor demanded by employers equals the quantity of labor supplied by workers.

Prevailing Wage

The average wage paid to employees in a specific area or industry, often determined for purposes of setting minimum wage levels on government contracts.

Black Market Activities

Transactions that take place outside of officially sanctioned channels, often illegal or unregulated by the government.