If the Market Price of a Good Does NOT Include

question 238

Multiple Choice

If the market price of a good does NOT include all of the costs and benefits that arise from the production or consumption of the good, then

• A) the market is perfectly competitive.
• B) an externality is present.
• C) society is consuming and producing the optimal amount of the good.
• D) resources are properly allocated.

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Definitions:

Accounts Payable

Money owed by a business to its suppliers or creditors for goods and services received but not yet paid for.

Recorded Increases

Entries in financial records that reflect an increase in assets, revenues, or any account that adds to the net worth or net income of a company.

Debited

In accounting, this term indicates that an entry has been made to the left side of an account, increasing assets or expenses, or decreasing equity, liability, or revenue.

Proprietorship

A business structure owned by a single individual, where the owner is personally responsible for the business's debts and liabilities.