The difference between private cost and social cost is that
A) social cost only considers the external cost borne by society.
B) social cost only considers the cost borne by people other than the producer.
C) private cost only considers the cost borne by producers of the good.
D) social cost also includes any external benefit whereas private cost excludes all external benefits.
E) There is no difference; the terms refer to the same cost.
C
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When the deficit increases under the concept of Ricardian Equivalence, what happens to savings in the private sector?
A) savers hedge on purchases B) nothing C) savings decrease D) savings increase
When a negative externality exists,
A. external costs are necessarily greater than private costs. B. social costs equal private costs. C. social costs are less than private costs. D. social costs are greater than private costs. E. none of the above