Which of the Following Is True of Externality

question 43

Multiple Choice

Which of the following is true of externality?

• A)An externality enhances the efficiency of the market system.
• B)An externality is not an economic problem because it is external to the market.
• C)An externality is a cost borne by the people who are directly or indirectly involved in the production of a good or service.
• D)An externality accrues to someone who had nothing to do with the production or consumption of a good or service.
• E)An externality refers to some unexpected change in the equilibrium price or quantity of a product.

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Definitions:

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis. It was the deadliest conflict in human history.

Wartime Agencies

Organizations created during times of war to oversee production, ration goods, and manage other aspects of the home front.

Production

The process of creating, manufacturing, or outputting goods and services through the combination of labor, materials, and technology.

Cold War

A period of geopolitical tension between the Soviet Union and the United States and their respective allies, from the end of World War II in 1945 until the dissolution of the Soviet Union in 1991.