When the social costs of using a resource exceed the private costs
A) that resource is underutilized.
B) use of that resource becomes unprofitable.
C) the price of that resource is bid up.
D) an external diseconomy exists.
E) there is a shift in the production possibilities curve.

Question

Quizplus · Accepted Answer

When the social costs of using a resource exceed the private costs, it means that there is an external diseconomy i.e. a cost imposed on society that is not accounted for by the private market. This can lead to negative externalities such as pollution or overuse of a resource, and can have harmful effects on the environment or public health.

When the Social Costs of Using a Resource Exceed the Private