Which Activity Generates a Negative Externality

question 34

Multiple Choice

Which activity generates a negative externality?

• A)You buy a new car,then discover it needs a new transmission.
• B)Your next-door neighbor mows the lawn at 6 A.M.
• C)The only two coffee shops in town conspire to raise prices.
• D)After Jane buys health insurance,she begins racing motorcycles on the weekends.

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Definitions:

Sales Department

The division within a company responsible for the sale of products and services, including marketing and customer relations.

Operating Income

The difference between gross profit and operating expenses.

Decision-Making Processes

The steps or stages involved in choosing between alternatives to reach a conclusion or determine a course of action.

Balanced Scorecard

A strategic performance measurement system that incorporates multiple performance dimensions by combining financial and nonfinancial measures.