Which of the Following Is an Example of an External

question 7

Multiple Choice

Which of the following is an example of an external benefit?

• A) More people start to install solar panels on their roofs, and as a result, electricity use goes down as does the pollution created by the generation of electricity.
• B) Firms are able to reduce their costs of production by using a more efficient technology.
• C) The city spends $500,000 to upgrade the local jail.
• D) A company opens a slaughterhouse at the end of your street.

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Definitions:

Business Entity

An organization that exists as a separate and distinct legal unit, capable of conducting business, entering into agreements, and owning property.

Operating Cycle

The average time period it takes for a business to convert its inventory into cash through sales.

Business Entity

An organization that engages in economic activities, recognized as a separate legal entity from its owners.

Less than Six Months

A term used to describe a period or duration that does not exceed six months.