Suppose That There Is a Negative Externality Associated with

question 72

Multiple Choice

Suppose that there is a negative externality associated with
Alcohol consumption in the United States (e.g., costs of publicly
Funded alcoholism treatment centers) .What will happen to the
Social costs of this externality if the United States eliminates all
Tariffs on alcohol imports?

• A)The social coasts will increase.
• B)They will not change.
• C)They will decrease.
• D)The social costs will increase but be offset by the private losses associated with increased imports as the tariffs are
• Eliminated.

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Definitions:

Equivalent Units

A measure used in cost accounting to express the amount of work done on incomplete units in terms of complete units.

First-in

Commonly part of the term "First-in, First-out (FIFO)", a method used in inventory management where the oldest stock is sold first.

Labor

Work performed by humans that is used in the production of goods and services.

Equivalent Unit

A metric in cost accounting that quantifies the effort invested in partially finished units by equating it to the output of completely finished units.