Congestion pollution urban decay and similar side effects of the market system are termed_____________?
Correct answer: B. externalities
- A. negatives
- B. externalities
- C. internalities
- D. tangentials
Explanation
Pollution and congestion impose costs on people who are not fully reflected in the market transaction, making them negative externalities. Internalities are costs or benefits overlooked by the decision-maker personally.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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