-In the figure above showing the costs and benefits of paper production, there is an
A) external cost associated with paper production.
B) external benefit associated with paper production.
C) external cost associated with paper consumption.
D) external benefit associated with paper consumption.

Question

-In the figure above showing the costs and benefits of paper production, there is an
A) external cost associated with paper production. 
B) external benefit associated with paper production. 
C) external cost associated with paper consumption. 
D) external benefit associated with paper consumption.

Quizplus · Accepted Answer

External costs are negative effects of production that are not reflected in the market price, such as pollution from paper production affecting the environment.

-In the Figure Above Showing the Costs and Benefits of Paper