Which of the following is a key difference between the economic activities of government

and those of private firms?

A. Private firms face the constraint of scarcity; government does not.

B. Government focuses primarily on equity; private firms focus only on efficiency.

C. Private economic activities create externalities; government activities do not.

D. Government has the legal right to force people to do things; private firms do not.

Question

Business

Edith Gentry

10 February, 09:57

Which of the following is a key difference between the economic activities of government

and those of private firms?

A. Private firms face the constraint of scarcity; government does not.

B. Government focuses primarily on equity; private firms focus only on efficiency.

C. Private economic activities create externalities; government activities do not.

D. Government has the legal right to force people to do things; private firms do not.

+1

Answers (1)

Know the Answer?

Esther · Answer 1

The answer is C. Private economic activities create externalities; government activities do not

Explanation:

In economics, externality is a situation in which the actions or activities of an organization results to a cost or benefits borne by a third party e. g the community.

This activities mostly arose from company's production or consumption. There are positive and negative externality.

Example of negative externality is pollution