If a Negative Externality Is Associated with the Production of Some

question 87

Multiple Choice

If a negative externality is associated with the production of some good, then

• A) marginal social cost minus marginal private cost is positive.
• B) too little of the good is being produced by the firm.
• C) the marginal social cost is less than the marginal social benefit.
• D) the price is equal to firms' marginal private cost.
• E) marginal social cost minus marginal private cost is negative.

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Definitions:

Consolidated Income Statement

An income statement combining the revenue, expenses, and net income of a parent company and its subsidiaries, presenting a comprehensive total for the corporate group.

Amortization

The process of gradually writing off the initial cost of an asset over its useful life.

Acquisition Differential

The difference between the purchase price of a company and the fair value of its identifiable assets and liabilities.

Non-Controlling Interest

A portion of the equity in a subsidiary not owned by the parent company, typically shown separately in the consolidated financial statements.