A Negative Externality

question 292

Multiple Choice

A negative externality

• A)is an adverse impact on a bystander.
• B)causes the product in a market to be under-produced.
• C)is an adverse impact on market participants.
• D)is present in markets where the good or service does not have any impact on bystanders.

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Definitions:

Full-cost Method

A method of accounting for all expenditures associated with the exploration and development of oil and gas reserves as capitalized costs, which are then amortized over the total volume of proven resources.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is globally accepted for financial reporting.

Operating Asset

An Operating Asset is an asset used by a company in its day-to-day operations to generate revenue, such as machinery, buildings, or equipment.

Components

Parts or elements that make up a larger system or compound.