Consider the Production of a Private Good,such as a Car,and

question 159

Multiple Choice

Consider the production of a private good,such as a car,and a common-resource good,such as fish.What do the markets for these two goods have in common?

• A) The quantity of output produced is inefficiently low.
• B) The quantity of output produced is inefficiently high.
• C) Both create a positive externality.
• D) Both markets are likely to arrive at the social optimum without government intervention.
• E) The price of both goods is inefficiently high.

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Definitions:

Accounting Cycle

The series of steps followed by an entity to collect, process, and report financial information, culminating in the preparation of financial statements for a specific period.

Adjusting Entry

Documentation produced at a period's end within accounting to properly allocate profits and outlays to the actual period they happened.

Closing Entry

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby preparing the books for the next accounting period.

Post-Closing Trial Balance

A list of all account balances after the closing entries have been made, ensuring the accuracy of the ledger.