ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Private costs
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External costs
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Private benefits
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External benefits
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Detailed explanation-1: -Term. An external benefit is a benefit not included in the market price of the goods and services being produced, i.e. a benefit not paid by those who receive it.
Detailed explanation-2: -The terms “social cost” and “external cost” are synonyms. Social Cost is summation of private cost and external cost. Social cost represents the total cost (private and external) being incurred to society.
Detailed explanation-3: -Sending vaccination reminders, making vaccines available in non-traditional places like workplaces, and reducing costs are important strategies for making sure more people get the flu vaccine.
Detailed explanation-4: -Q. Suppose that a family moves in next door to this smelly factory. Who is causing the externalities problem? The factory.