An Externality Is

question 442

Multiple Choice

An externality is

• A)the costs that parties incur in the process of agreeing and following through on a bargain.
• B)the uncompensated impact of one person's actions on the well-being of a bystander.
• C)the proposition that private parties can bargain without cost over the allocation of resources.
• D)a market equilibrium tax.

---

Definitions:

Credit Terms

Credit Terms are the payment terms and conditions established by a seller, including the period that has to pass before an invoice is considered overdue.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.

Ending Inventory

The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold at the end of an accounting period.