Air Pollution Is an External Cost Because It

question 304

Multiple Choice

Air pollution is an external cost because it

• A) is a pollution of the external environment.
• B) is a cost not borne by the producer of the good.
• C) benefits no one.
• D) is not associated with resource use.
• E) is created only when production occurs.

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Definitions:

Net Income

The final profit figure for a company, calculated by subtracting all expenditures and taxes from revenues.

Total Liabilities

The combined debts and obligations that a company owes to outside parties at any given time.

Accrued Expenses

Expenses that have been incurred but not yet paid for, often recognized in accounting through an adjusting entry.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset's value over time.