One Way to Make Consumers Take a Positive Externality into Account

question 122

Multiple Choice

One way to make consumers take a positive externality into account when making demand decisions is to:

• A)place a tax on the item.
• B)subsidize the purchase of the item.
• C)tax the producers of the item.
• D)None of these are true.

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Definitions:

Net Income

A company's earnings after deducting expenses and taxes from the total sales.

Overstatement

When the reported amount or value of an asset, expense, or income is higher than the real amount.

Periodic Inventory System

An inventory system in which ending inventory and cost of goods sold are determined at the end of the accounting period based on a physical inventory count.

Physical Inventory

Physical inventory refers to the process of counting and verifying the physical stock of goods a company holds in its possession.