When an Activity Results in the Imposition of External Costs

question 69

True/False

When an activity results in the imposition of external costs, markets will produce more than the socially optimal level of that activity.

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Definitions:

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured, offering protection against high unexpected healthcare costs.

Third-Party Payments

Payments made by someone other than the consumer or provider of a good or service, often by insurance companies or government agencies.

Healthcare Expenditures

The total amount of spending on health services and products in a specific period, including public and private spending.

Government

A system or group of people governing an organized community, often a state.