Which of the Following Is True

question 105

Multiple Choice

Which of the following is true?

• A) MSC = MC + Marginal external cost
• B) MSC = Marginal external cost + marginal external benefit
• C) MC = Marginal external cost - MSC
• D) MC = Marginal external benefit + MSC

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Definitions:

Straight Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Capital Cost Allowance

A tax deduction in Canada for the depreciation of tangible property.

Deferred Tax

A tax liability or asset that arises due to temporary differences between the book value and tax value of assets and liabilities.

Deferred Tax Asset

A tax benefit that arises from temporary differences between the book and the taxable income, often due to allowances and deductions recognized at different times.