Correctly Complete the Sentences Below from the Options Which Follow

question 84

Short Answer

Correctly complete the sentences below from the options which follow.
(a) If the MSC > the MSB then:
(b) If the MSB > the MSC, then:
(c) If the MSC = MC, then:

(i)the appropriate level of output is being produced that will lead to social efficiency.
(ii)insufficient output will be produced by the private sector for social efficiency to be achieved.
(iii)too much output will be produced by the private sector for social efficiency to be achieved.

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Definitions:

Special Revenue Funds

Funds used by governments to account for revenue from specific sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

Enterprise Funds

Funds used by a government to account for operations financed and operated in a manner similar to private business enterprises, where the intent is that the costs of providing goods or services to the public on a continuing basis be financed or recovered primarily through user charges.

Capital Projects Funds

Governmental accounting funds used to account for financial resources that are allocated for the acquisition or construction of major capital assets by a government, except those financed by proprietary funds.

Debt Service Funds

Governmental funds used to account for the accumulation of resources for, and the payment of, long-term debt principal and interest.