Which of the Following Statements About Internalising a Negative Production

question 152

Multiple Choice

Which of the following statements about internalising a negative production externality is LEAST correct?

• A)internalising a negative production externality will cause the supply curve for the good to shift to the left
• B)internalising a negative production externality will cause an industry to decrease the quantity it supplies to the market and increase the price of the good produced
• C)internalising a negative production externality will cause an industry to increase the quantity it supplies to the market and decrease the price of the good produced
• D)internalising a negative production externality will cause an industry to move closer to the socially optimal price and quantity of the good

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Definitions:

Zapata Test

A legal standard used to determine the independence and good faith of a special litigation committee's investigation and recommendations in corporate litigation.

Property Dividend

A type of dividend payment made in assets other than cash, such as stocks or physical assets.

Excess Liquidity

The situation where an organization or individual possesses more cash resources than are necessary for current operations or investments, potentially indicating underutilization of assets.

Common Shareholders

Shareholders who claim the residual profits and assets of a corporation, and usually have the exclusive power and right to elect the directors of the corporation.