1 d. What is social cost? (1 mark) a measure of the cost of a negative externality . a measure of the loss in profit to the seller as the result of a negative externality . a measure of the cost reduction when the negative externality is eliminated . a measure of the cost incurred by the government from market intervention Why are markets often inefficient when negative externalities are present?(1 mark) . Private costs exceed social costs at the private market solution. . Externalities can never be corrected without government regulation. . Social costs exceed private costs at the private market solution. . Production externalities lead to consumption externalities. What will arise when negative externalities are present in a market? (1 mark) . Private costs will be greater than social costs. . Social costs will be greater than private costs. . Government will regulate the externalities in the market. . d. The market will not be able to reach any equilibrium situation