A Large Farming Operation Which Uses a Potent Fertiliser Is

question 29

Multiple Choice

A large farming operation which uses a potent fertiliser is located up river from a trout farmer. If property rights of the river exist and transactions costs are low, the amount of pollution will be

• A) inefficient if the farming operation owns the river.
• B) efficient if either the farming operation or the trout farmer owns the river.
• C) always inefficient.
• D) efficient only if the trout farmer owns the river.

---

Definitions:

Calendar Year

A period of 365 days (366 in a leap year) starting from January 1st to December 31st, used as a financial or operational year by some organizations.

Insurance Expense

The cost incurred by a company to insure its assets, operations, and potentially its employees, recognized as an expense.

Adjusting Entry

An accounting entry made to correct, update, or complete financial records at the end of an accounting period.

Net Income

The total amount of profit earned by a company after all expenses and taxes have been deducted from total revenue.