The Opportunity Cost to a City for Using Local Tax

question 44

Multiple Choice

The opportunity cost to a city for using local tax revenues to construct a new park is the:

• A) best alternative foregone by building the park.
• B) dollar cost of constructing the new park.
• C) dollar cost of the old park.
• D) increased taxes necessary to pay for maintenance of the new park.

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Definitions:

Accounts Receivable

Represents the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Nonsufficient Funds

Nonsufficient funds (NSF) is a term used in banking to indicate that a demand for payment cannot be honored because there are inadequate funds in the account on which the instrument was drawn.

Accounts Receivable

Accounts receivable is the money owed to a business by its clients or customers for goods or services delivered but not yet paid for.