Economics · Oct / Nov 2017 · Paper 12 · Question 2
2281Market failure
A government allowed a building company to construct new houses which destroyed an area designated as an area of natural beauty. Which concepts can be applied to this statement?
- Abudget surplus; public sector
- Bexternal cost; opportunity cost
- Cgovernment subsidy; mixed economy
- Dprivate enterprise; budget deficit
As printed in the paper
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Correct answer: B. external cost; opportunity cost
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