Explain How the Following Two Activities Could Create Both a Negative

question 99

Essay

Explain how the following two activities could create both a negative externality and a positive externality:
1. A bee farm
2. A fireworks display

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Definitions:

Owner's Capital

The total equity claimed by the owner of a sole proprietorship or partnership, reflecting the residual assets of the business after liabilities.

Income Summary

An account in which the revenues and expenses are transferred at the end of an accounting period to determine the net income or loss.

Owner's Capital

The amount of money and other assets invested in a business by its owner or owners.

Owner's Drawings

The withdrawal of business assets by the owner for personal use.