As a General Rule, If Pollution Costs Are External, Firms

question 9

Multiple Choice

As a general rule, if pollution costs are external, firms will produce

• A) too little of a polluting good.
• B) too much of a polluting good.
• C) an optimal amount of a polluting good.
• D) cannot be determined without additional information.

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Definitions:

Target Cash Balance

The ideal amount of cash that a company aims to maintain in order to manage daily financial operations and contingencies effectively.

Collection Float

The amount of time it takes for money from checks or other types of payments to be processed and available in the company’s account.

Disbursement Float

The interval between the issuance of a check and the actual deduction of the amount from the issuer's account.

Lockbox System

A service provided by banks to companies for the collection of payments from customers, whereby payments are sent to a special post office box instead of to the company.