The concept of 'Social Marginal Cost' is relevant for:
A. Only determining market prices
B. Only calculating private profits
C. Private decision making only
D. Correcting externalities and optimal provision of public goods
Answer: Option D
Solution (By JKSSB Mock Tests)
Social marginal cost includes both private costs and external costs. It is used in the analysis of externalities and in determining the socially optimal level of output.
Explanation:
While unemployment can be voluntary or involuntary, the standard cause-based classification includes frictional, structural, cyclical and seasonal unemployment.
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