Which of the Following Statements Is Not True

question 4

Multiple Choice

Which of the following statements is not true?

• A) If marginal social cost and marginal private cost are the same, any externality that exists will be positive.
• B) If marginal externality costs are not zero, externalities exist.
• C) An expansion of property rights to include air quality and scenic beauty would bring some private markets close to a socially optimal equilibrium.
• D) The existence of pollution as the byproduct of a production or exchange process indicates a market failure.
• E) When municipal water supplies have heavy concentration of agricultural chemicals, it is probable that agricultural output from the area is produced in quantities greater than the socially optimal level.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money or money earned from deposited funds.

Interest Payable

Refers to the amount of interest that has been incurred on borrowed funds but has not yet been paid out to the lender as of the reporting date.

Current Liabilities

Obligations that a company must pay within the coming year or within its normal operating cycle, indicating the company's short-term financial responsibilities.