The Concept of External Cost Is Associated with a Negative

question 164

True/False

The concept of external cost is associated with a negative externality, but not with a positive externality.

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Definitions:

Sole Proprietorship

A business structure where a single individual owns and operates the business.

Corporate Income Tax

A tax on the income or profit of corporations, which contributes to government revenue.

Gross Investment

The total amount of money spent on capital goods, or assets intended to produce future income, not accounting for depreciation.

Net Investment

The total amount spent on capital assets, like buildings and machinery, minus depreciation. It reflects the increase in the value of physical assets.