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Multiple Choice Questions

Social cost is higher than economic cost because ........

Indian Economy Growth and development

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Social cost is higher than economic cost because

This questions was previously asked in

EPFO AO EO 2017

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society is bigger than economy

society includes polity, while economy does not include it

cost borne by standers is positive

society includes both consumers and producers

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Explanation:

The social costs are the costs incurred by the society as a whole. These are the private costs plus any costs borne by the rest of the society. So social costs are higher than private costs when firms are able to escape some of the economic costs of production. Such a situation is called negative externalities.

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