When the Costs of a Good Are Paid for by Nonconsumers

question 146

Multiple Choice

When the costs of a good are paid for by nonconsumers, ______ of the good is produced.

• A) an inefficiently small amount
• B) an efficient amount
• C) an inefficiently large amount
• D) none

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Definitions:

Accounts Payable

Money owed by a business to its suppliers or vendors for goods and services purchased on credit.

Operating Activities

Activities that relate to the principal revenue-producing activities of an entity and other activities that are not investing or financing activities.

Accounts Receivable

Debts owed by clients to a company for products or services that have been provided but remain unpaid.

Indirect Method

A way of calculating cash flows from operating activities in the statement of cash flows by adjusting net income for changes in balance sheet items.