A Negative Externality (That Has Not Been Internalized) Causes the

question 11

Multiple Choice

A negative externality (that has not been internalized) causes the

• A) optimal quantity to exceed the equilibrium quantity.
• B) equilibrium quantity to be either above or below the optimal quantity.
• C) equilibrium quantity to equal the optimal quantity.
• D) equilibrium quantity to exceed the optimal quantity.

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditures to the appropriate period.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those presented on a bank statement to ensure they are consistent and accurate.

Outstanding Checks

Checks that have been written and recorded in a checking account's ledger but have not yet been cleared or deducted from the bank's balance.

NSF Check

A check that cannot be processed due to insufficient funds in the account on which it was drawn.