Which of the Following Methods Could Be Used to Correct

question 47

Multiple Choice

Which of the following methods could be used to correct for external costs?

• A) Impose a tax or an effluent fee on the offenders.
• B) Have the offender clean up the pollution it caused.
• C) Require firms in the industry to install pollution control devices.
• D) All of the above would be appropriate.

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Definitions:

Unearned Rent

Income received by a landlord for which the services (use of property) have not yet been provided.

Notes Payable

A financial obligation or loan documented by a written promissory note, specifying the terms of repayment.

Mortgage Payable

A long-term liability account that records the amount owed on a property mortgage.

Social Security Tax

Taxes collected to fund the Social Security program, providing benefits for retirees, the disabled, and children of deceased workers.