One Reason Why Property Rights Help Achieve an Efficient Level

question 194

Multiple Choice

One reason why property rights help achieve an efficient level of pollution is because property rights

• A) force the marginal private cost to equal the marginal social cost.
• B) force the marginal social cost to zero.
• C) force the marginal external cost to a lower level than marginal private cost.
• D) eliminate marginal private costs.
• E) change the marginal external cost so that they are equal to the marginal social benefit.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, making the expense predictable and consistent.

Income Taxes

Taxes levied by governments on individuals' or businesses' net income, where the amount owed varies based on the level of the income earned.

Operating Cash Inflow

Cash generated from a company's primary business operations, excluding non-operational sources like investments or financing.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of maximizing a firm's value through strategic asset allocation.