--%>
Assignment Help - homework help

What is social cost of production

What is social cost of production?

E

Expert

Verified

Social Cost:

Under the production of goods, costs will be incurred not only through the owners business but also through the society. Cost incurred through a society in terms of resources used within the production of a commodity is termed as social cost of production. This is the opportunity cost borne by an entire society or community. Social costs have not only the cost borne through the owners of a business or producers but also it is the cost passed on to the society. For illustration, production of exact commodities (rubber, chemical, petroleum and steel) causes environment pollution.

Pollution caused whereas producing a commodity inflicts a social cost on those residents who undergo ill health. Several industries leave wastes that the adjoining areas have to bear. A cost which is not borne by the firm except is incurred by others in the society is termed as external cost. Social cost contains external costs and privet cost (since firms are also apart of society). Therefore, social cost is the total cost of the society on account of production of a commodity. For illustration, the social cost of liquor sold through a firm includes the cost incurred through the firm as private cost and the cost as expenditure of additional police force to deal along with the drunken people and those other incidental expenses for the society.

   Related Questions in Managerial Economics

  • Q : Demand demand has three

    demand has three essentials-damand+purchasing power+.???

    		•
  • Q : Human Capital Accumulation and the

    A society’s stock of human capital would be least probable to grow as a consequence of: (w) federal subsidies for college education. (x) sustained unemployment during a recession. (y) apprenticeship programs for construction workers. (z) retrain

    		•
  • Q : Purely competitive labor market is

    When this purely competitive labor market is firstly in equilibrium at D0L, S0L, a move to equilibrium at D1L, S0L would be inconsistent along with increases in: (w) the price of output. (x) labor productivi

    		•
  • Q : Function of Profit Maximization in

    For a purely competitive firm operating within a competitive labor market as: (1) the marginal resource cost of labor exceeds the wage rate. (2) the supply of labor is perfectly inelastic. (3) total labor costs are independent of the

    		•
  • Q : Managerial slack and x-inefficiency A

    A firm along with extreme managerial slack (i.e., X-inefficiency) can best survive when, it: (1) maximizes its economic profits. (2) spends large amounts on marketing and advertising. (3) has important market power and faces little potential competiti

    		•
  • Q : Saving of production costs attributable

    The rental value of a high quality piece of agricultural land timely era is: (w) negatively associated to the price of agricultural output this could produce. (x) unrelated to the costs of its cultivation. (y) equal to the saving of production costs a

    		•
  • Q : Wage Rates and Marginal Resource Costs

    When all markets wherein a firm operates are purely competitive, in equilibrium the marginal resource cost of labor is the same to the: (w) firm’s marginal revenue. (x) marginal cost of output. (y) wage rate the firm must pay to hire more worker

    		•
  • Q : Diminishing returns imply economic

    This is not true that the law of diminishing returns which it: (i) Consists applications in numerous areas outside economics. (ii) Is encountered in many ways in economics. (iii) Implies that continually increasing production ultimately entails increa

    		•
  • Q : Elasticity of the Supply of Labor of

    This supply of labor worker is roughly unitarily wage elastic as the wage rate increases from: (1) $5 per hour to $10 per hour. (2) $5 per hour to $25 per hour. (3) $10 per hour to $25 per hour. (4) $10 per hour to $40 per hour. (5) $25.01 per hour to

    		•
  • Q : Elasticity of Demand for Labor in Firm

    Increasing the wage rate increases total wages received through workers when the demand for labor is: (w) relatively elastic. (x) relatively inelastic. (y) unitarily elastic. (z) perfectly elastic.