An Externality Is Defined as

question 204

Multiple Choice

An externality is defined as

• A)an opportunity cost that is not considered, which causes inefficiency.
• B)a social cost that affects parties external to a transaction.
• C)a transaction which imposes a loss on one of the parties involved.
• D)a "cost of doing business" that cannot be allocated to any particular good.
• E)the increase in cost associated with increased production.

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Definitions:

Gain Or Loss

The financial result that occurs when the selling price of an asset differs from its purchase price.

Batting Cages

Enclosed areas designed for practicing batting skills in baseball or softball, usually equipped with pitching machines.

Fixed Assets

Long-term tangible assets used in operations and not expected to be converted to cash in the short term, such as buildings and machinery.

Accumulated Depreciation

The cumulative depreciation expense recorded for an asset from the time it was brought into service.