Exhibit 30-5 ​ Refer to Exhibit 30-5. If a Positive Externality Exists, Then

question 155

Multiple Choice

Exhibit 30-5 ​

Refer to Exhibit 30-5. If a positive externality exists, then curve 1 represents the __________, curve 2 represents the __________, curve 3 represents the __________ and Q₁ represents the __________.

• A)marginal private cost curve; demand curve; marginal social benefit curve; market output
• B)demand curve; marginal social benefit curve; supply curve; market output
• C)marginal social benefit curve; demand curve; marginal private cost curve; socially optimal output
• D)demand curve; marginal social benefit curve; supply curve; socially optimal output
• E)marginal social benefit curve; supply curve; marginal private cost curve; market output

---

Definitions:

Note

A financial instrument that represents a debt or obligation between two parties, wherein the issuer promises to pay the holder a certain amount of money at a future date.

Adjusting Journal Entry

An entry made in the accounting journals at the end of an accounting period to allocate items between accounting periods.

Allowance for Doubtful Accounts

An estimate of the amount of accounts receivable that may not be collected, used to reduce the carrying amount of receivables on the balance sheet.

Net Realizable Value

The estimated selling price of goods, minus the costs of their sale or disposal.