Which of the following is NOT a characteristic of social costs?

Social costs encompass the total costs to society arising from an economic activity, combining both private costs (costs borne by individuals or companies) and any additional costs imposed on third parties or the environment. Therefore, stating that social costs always being lower than private costs does not hold true.

In fact, social costs can often be higher than private costs, particularly in scenarios involving negative externalities, where the actions of individuals or firms impose costs on others, such as pollution affecting public health or environmental degradation. This means that the true cost to society (social costs) includes both the private expenditures and the unaccounted-for external damages.

By understanding this, it becomes clear why this statement is not characteristic of social costs, as they can reflect a range of impacts beyond just those experienced by the individual or business. Consequently, the other choices illustrate various aspects of social costs, such as the inclusion of private costs, environmental impacts, and their association with negative externalities.