An Externality Is

question 89

Multiple Choice

An externality is

• A)the amount by which price exceeds marginal private cost.
• B)the amount by which price exceeds marginal social cost.
• C)the effect of government regulation on market price and output.
• D)someone who consumes a good without paying for it.
• E)a cost or benefit that arises from an activity but affects people not part of the original activity.

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Definitions:

Cash Account

An account reflecting the amount of cash a company holds, including physical currency and money in bank accounts.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of the company's financial condition.

Income Statement

A financial document summarizing a company's revenues, expenses, and profits over a specific period, usually a quarter or year.

Net Cash Provided

A financial metric that represents the amount of cash generated by a company's operating activities.