Which of These Activities Will Most Likely Impose an External

question 93

Multiple Choice

Which of these activities will most likely impose an external cost?

• A)An athlete works out at a gym.
• B)A secretary smokes a cigarette in a crowded break room.
• C)A young mother pushes her baby in a stroller.
• D)A construction worker eats a hotdog during his lunch break.

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Definitions:

Negative Amortization

A situation in a loan where the monthly payments are not enough to cover the interest costs, causing the loan balance to increase rather than decrease over time.

Commission

A service fee charged by a broker or agent for facilitating transactions, such as in stocks or real estate.

Monthly Interest Charges

The amount of interest that accrues on a loan or debt and is payable on a monthly basis.

Sarbanes-Oxley Act

A United States federal law that set new or expanded requirements for all U.S. public company boards, management, and public accounting firms, aiming to protect investors from fraudulent financial reporting.