If Negative Externalities Exist, Then in a Market with No

question 61

Multiple Choice

If negative externalities exist, then in a market with no property rights,

• A) MSC = MSB.
• B) MSC < MSB.
• C) MSC > MSB.
• D) MSC = marginal external cost.
• E) MC > MSC.

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Definitions:

Annually

Occurring once every year.

U.S. GAAP

The United States Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures used in the U.S.

Written Down

A term referring to an asset that has been depreciated or devalued on the financial statements.

Carrying Value

The amount an asset is valued at on a balance sheet, subtracting depreciation and amortization.