When Does an Externality Occur

question 122

Multiple Choice

When does an externality occur?

• A) when one person's production or consumption of a good affects another person
• B) when a producer's long-run average costs fall
• C) when a consumer's marginal utility from consuming a good increases
• D) when international trade leads to improvement in a country's economic welfare

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Definitions:

Kin Selection

An evolutionary strategy that favors the reproductive success of an organism's relatives, even at a cost to the organism's own survival and reproduction.

Emotional Response

A complex psychological and physiological reaction to a perceived event, situation, or stimulus, characterized by subjective feelings, changes in bodily state, and expressions.

Young Chimpanzees

Juvenile members of the species Pan troglodytes, known for their complex social behaviors and learning capabilities.

Human Toddlers

Young children typically aged between 1 and 3 years old, characterized by rapid physical and cognitive development, including walking and language acquisition.