Which of the Following Statements Is Correct About a Market

question 386

Multiple Choice

Which of the following statements is correct about a market in which pollution is emitted?

• A)Both corrective taxes and pollution permits internalize the externality of pollution.
• B)Corrective taxes internalize the externality of pollution, but pollution permits do not internalize that externality.
• C)Corrective taxes fail to internalize the externality of pollution, but corrective taxes internalize that externality.
• D)Neither corrective taxes nor pollution permits internalize the externality of pollution.

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Definitions:

Variable Costing

An accounting approach that solely accounts for variable production expenses like direct materials, direct labor, and variable manufacturing overhead in the calculation of product costs.

Limitations

The constraints or restrictions that hinder a process, investigation, or analysis.

Break-even

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and the company has "broken even" on an investment or product.

Variable Selling Costs

Variable selling costs are expenses that vary directly with the level of production or sales volume, such as commissions and shipping charges.