Economics · Oct / Nov 2016 · Paper 12 · Question 7
2281Market failure
What indicates the existence of external costs in an economy?
- AAn international trade deficit has caused the country to be in debt.
- BNational companies have borrowed from foreign investors.
- CPrivate costs of production are less than social costs.
- DPrivate costs of production are more than social benefits.
As printed in the paper
Show the answer
Correct answer: C. Private costs of production are less than social costs.
Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.