If the Production of a Good Causes an External Cost,then

question 280

Multiple Choice

If the production of a good causes an external cost,then the efficient quantity is

• A) equal to the quantity at which the marginal benefit equals marginal cost.
• B) less than the quantity at which the marginal benefit equals the marginal cost.
• C) more than the quantity at which the marginal benefit equals the marginal cost.
• D) the quantity at which the marginal private benefit is greater than the marginal social benefit.
• E) None of the above answers is correct.

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Definitions:

Comprehensive Income

It encompasses all changes in equity during a period, except those resulting from investments by and distributions to owners.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profit.

Other Comprehensive Income

Other Comprehensive Income includes revenues, expenses, gains, and losses that are not included in net income but affect equity, such as unrealized gains on securities.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the owners' claim on the company's assets.