O-LevelEconomicsThe allocation of resources2281/11 · Oct/Nov 2011 · Q111 Mark

What is an example of an external cost?

Acompany's transport costs

Bthe cost of bringing about a merger

Cthe cost of buying components from suppliers

Dthe cost of industrial pollution

✓ Correct answer

D: the cost of industrial pollution

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2011 Paper 1 Variant 1, question 11.

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