Table 10-4 -Refer to Table 10-4. Which of the Following Policies Would

question 215

Multiple Choice

Table 10-4
-Refer to Table 10-4. Which of the following policies would move the market from the market equilibrium to the socially optimal equilibrium?

• A)a tax of $4 per unit of output
• B)a subsidy of $4 per unit of output
• C)a tax of $6 per unit of output
• D)a subsidy of $6 per unit of output

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Definitions:

Depreciating

The process of allocating the cost of a tangible asset over its useful life, reflecting a decrease in its value over time.

Accounts Receivable

Amounts owed to a business by customers for goods or services delivered but not yet paid for, represented as a current asset on the balance sheet.

Allowance Method

A method in accounting used to estimate bad debts expense by anticipating which accounts receivable may not be collected.

Balance Sheet Accounts

Accounts reported on the balance sheet, representing the company's assets, liabilities, and equity at a specific point in time.