When a factory pollutes the environment, there are costs associated with the damage to human health, property values, wildlife habitat, reduction of recreation possibilities, or other negative impacts. The term ________________ is used to describe those costs, which fall on third parties unrelated to the business.
a. positive externalities
b. additional external costs
c. collateral damage
d. social externalities
b. additional external costs
Additional external costs are those additional costs incurred by third parties outside the production process when a unit of output is produced.
You might also like to view...
Many public utilities are permitted to operate as monopolies because they enjoy economies of large-scale production
a. True b. False Indicate whether the statement is true or false
Carefully explain why there are gains from intraindustry trade
What will be an ideal response?
Economic efficiency in a competitive market is achieved when
A) economic surplus is equal to consumer surplus. B) consumers and producers are satisfied. C) the marginal benefit equals the marginal cost from the last unit sold. D) producer surplus equals the total amount firms receive from consumers minus the cost of production.
When ________, the price level rises, inventories decrease and firms respond by increasing output and employment.
A. aggregate demand increases B. aggregate supply decreases C. aggregate demand decreases D. aggregate supply increases