All of the Following Are Examples of an Externality EXCEPT

question 15

Multiple Choice

All of the following are examples of an externality EXCEPT:

• A)bees kept to make honey pollinate plants belonging to a nearby farmer.
• B)smoke from a factory imposes cleanup costs on nearby residents.
• C)a group purchases a farm on which to grow its own food.
• D)a company dumps toxic waste into a river,forcing people downstream to drink polluted water.
• E)a school club cleans up a public beach,creating a litter-free and safer swim area for all beachgoers.

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Definitions:

Operating Income

A company's profit after subtracting operating expenses, such as wages and cost of goods sold, but before deducting interest and taxes.

Divisional Operating Income

The profit earned by a specific division or segment of a company after deducting all direct and indirect expenses but before interest and taxes.

Top Management

The highest tier of executives and decision-makers in an organization, responsible for overall strategy and policies.

Cost Price Approach

An approach to transfer pricing that uses cost as the basis for setting the transfer price.