The Differences Between the Private and Social Costs of Economic

question 129

Multiple Choice

The differences between the private and social costs of economic behavior are known as

• A)setbacks.
• B)variances.
• C)deviations
• D)externalities.

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Definitions:

Capitalized

Refers to recording an expense or cost as an asset on the balance sheet, rather than as an expense on the income statement, to spread out the expense over its useful life.

Long-Lived Assets

These are tangible or intangible assets that a company expects to use for more than one year, including property, plant, and equipment.

Economic Benefits

The gains derived from actions or decisions, typically measured in terms of revenue or income generated or costs saved.

Service Potential

The capacity or capability of an asset, especially a non-financial asset, to provide services or benefits over its useful life.