What are social costs? How do they differ from private costs?
What will be an ideal response?
Social costs are costs borne by society whenever a resource use occurs. Social costs include private costs plus external costs, so when external costs are zero, social costs are the same as private costs.
You might also like to view...
Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. How many cups of coffee per day will Jane buy?
A) 1 B) 2 C) 3 D) None
Why are property rights important in economic development?
What will be an ideal response?
A firm should always shut down if its revenue is
A) declining. B) less than its average fixed costs. C) less than its total costs. D) less than its avoidable costs.
The slope of a consumer's budget constraint is unaffected by a change in income
a. True b. False Indicate whether the statement is true or false