Evidence of External Costs in the Production of a Product

question 16

Multiple Choice

Evidence of external costs in the production of a product is present if

• A) the price of the product is higher than it should be.
• B) the production cost increases because of an increase in the minimum wage.
• C) non-buyers and/or non-producers of the product experience a loss for which they are not compensated.
• D) buyers refuse to purchase the product.
• E) producers pay all of the costs of producing the good or service.

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Definitions:

Security Interest

is a legal claim on collateral that has been pledged, usually to obtain a loan, that gives a creditor the right to repossession if the debtor defaults.

Vested

A legal term indicating that an individual has an absolute right to an asset, benefit, or property, which cannot be taken away without consent.

Perfection

In legal terms, the process of securing a secured interest in an asset, ensuring priority over other claims in case of debtor default.

Motor Vehicle

A self-propelled vehicle used for transporting passengers or goods on ground.