Question

51 multiple choice 1 point
for a negative externality, the _______________ than the costs imposed on society as a whole.

• private costs of an action are less
• social costs of an action are less
• private benefits of an action are more
• social benefits of an action are more

52 multiple choice 1 point
in order for a good to be classified as __________, when one person uses the good, others are also able to use it.

• nonrivalrous
• unrivalrous
• unexcludable
• nonexcludable

Explanation:

Question 51

A negative externality occurs when the private cost (cost to the individual or firm) of an action is less than the social cost (private cost + external cost, which is the cost imposed on society). So we analyze each option:

• Option 1: "private costs of an action are less" matches the definition of negative externality (social cost = private cost + external cost, so private cost < social cost).
• Option 2: Social costs include private and external costs, so social costs can't be less than the total (social) costs. Eliminate.
• Option 3: The question is about costs, not benefits. Eliminate.
• Option 4: The question is about costs, not benefits. Eliminate.

Nonrivalrous goods are those where one person's use does not reduce the ability of others to use the good (e.g., a public park, knowledge). The term "nonrivalrous" is the correct economic term. "Unrivalrous" is incorrect spelling. Unexcludable/nonexcludable refer to the ability to prevent others from using, not about simultaneous use.

Answer:

A. private costs of an action are less

Question 52