A Consequence of a Negative Externality Is That Social Costs

question 60

Multiple Choice

A consequence of a negative externality is that social costs __________ private costs,and the efficient level of output __________.

• A) equal; does not require any type of government intervention
• B) are less than; requires the government to create a subsidy
• C) are greater than; requires the government to impose a tax
• D) are greater than; requires the government to create a subsidy
• E) are less than; requires the government to impose a tax

Identify the conditions under which insurance coverage commences and the significance of temporary coverage agreements.

Interpret the roles and responsibilities of the insured, insurer, and beneficiary in insurance policies.

Recognize how courts interpret insurance policy ambiguities and the operational definition of insurable interest.

Differentiate between various types of insurance contracts and the concept of indemnity.

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Definitions:

Equity Funds

Investments that are made into companies by purchasing shares, thereby gaining an equity interest in the company.

Repaid

Refers to the act of paying back money that was borrowed from an individual, bank, or financial institution.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent or salaries.

Owner's Equity

The total assets of a business minus its total liabilities; represents the ownership interest of the shareholders or owner(s).