Free Market Economies Underproduce Goods with Positive Externalities Because

question 46

Multiple Choice

Free market economies underproduce goods with positive externalities because

• A)there are no benefits to the production of these goods.
• B)the additional social benefits are not taken into account by the marketplace.
• C)the additional social benefits cannot be measured.
• D)the additional social benefits are too small to matter.

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Definitions:

Master Budget

An all-encompassing financial plan for an organization, covering all of its operations and financial activities within a specific period.

Operating

A term relating to the daily activities of a business that are necessary for it to run and make a profit.

Financing

The process of providing or obtaining funds for business activities, making purchases, or investing.

Budgeted Volume

The projected quantity of sales or production specified in a company's budget, used for financial and operational planning.