A Government Passes a New Law Allowing Only 1,000 Tons

question 168

Multiple Choice

A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true?

• A) The pollution will be created by those least willing and able to pay the damages.
• B) The pollution will be created by those most willing and able to pay for the right to pollute.
• C) The funds collected by the government will be enough to compensate any individuals harmed by the pollution.
• D) Pollution will increase from zero to 1,000 units per day.
• E) There will be no incentive for polluters to try to sneak emissions past government monitoring devices.

Interpret the effects of intra-entity sales on subsidiary income and dividends.

Calculate consolidated totals for equipment, revenues, cost of goods sold, operating expenses, noncontrolling interest, and retained earnings adjustments.

Determine the impact of the equity method of accounting on intra-entity transactions.

Comprehend the treatment of unrecognized intra-entity gross profit in consolidation.

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Definitions:

Unequally

In a manner that is not equal or uniform, often resulting in disparities or imbalances in treatment, opportunities, or conditions.

Unfairly

In a manner that is unjust or prejudiced, not giving equal treatment or opportunity.

Undocumented Immigrants

Persons living in a country without official authorization or paperwork, often seeking better living conditions or fleeing from hardship.

Payroll Taxes

are taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff, used to fund social security and healthcare programs.