If a Good Has an External Cost,the

question 104

Multiple Choice

If a good has an external cost,the

• A) unregulated competitive market outcome is efficient.
• B) marginal private cost reflects the external cost.
• C) unregulated competitive market outcome is inefficient.
• D) marginal social benefit is equal to the marginal social cost when the market is in equilibrium.
• E) external benefit must equal the external cost.

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Definitions:

Sole Proprietorship

A type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity.

Personal Loan

An unsecured loan provided by a financial institution based on the borrower's creditworthiness, typically used for personal expenses or consolidating debt.

Personal Income Tax

A tax levied on individuals or households based on the income they receive from work, investments, or other sources.