An Example of a Positive Externality Is When

question 29

Multiple Choice

An example of a positive externality is when

• A)an automobile emits a pollutant.
• B)your neighbor plants a beautiful garden that visible from your house.
• C)a virus spreads throughout a child care center.
• D)an electric utility burns coal and emits smoke.
• E)any act has a negative effect, or cost, on the well-being of others.

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Definitions:

Net Sales

The amount of sales generated by a company after deductions for returns, allowances for damaged or missing goods, and discounts.

Accounts Receivable

Amounts owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Receivables Turnover Ratio

A financial metric that measures how efficiently a company collects cash from credit customers.

Sales Returns

Goods returned by customers to the seller after the sale has occurred, typically due to defects or dissatisfaction.