CAIE A-Level Economics 7.4.1 Social costs
Practise calculating and interpreting social costs from private and external costs in market diagrams and real-world contexts.
- Syllabus
- 2026–2028
- Course
- Economics 9708
- Level
- A2
Exam points
- calculate social cost as private cost plus external cost from project or market data
- use a diagram to show MSC above MPC, lower output and higher price for steel
7.4.1—Social costs question 1
[Maximum number: 1]
Some multinational oil companies extracting oil in developing countries are now required to repair the damage they do to the environment.
What best describes the total costs incurred by the oil companies in such circumstances?
A
external costs
B
private costs plus external costs
C
social costs plus external costs
D
social costs plus private costs
B
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