In General,an Externality Is Created When

question 118

Multiple Choice

In general,an externality is created when

• A) people are affected (other than by price) by a transaction which they were not part of.
• B) firms produce a product of low quality and consumers don't like it.
• C) firms have to pay for polluting the environment.
• D) the government subsidizes education.

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Definitions:

Interior Upholstery

A type of material, including fabrics and leathers, used to cover indoor furniture and decor elements, enhancing the interior aesthetic and comfort.

Direct Materials

Raw materials that are directly attributed to the production of goods, identifiable as part of the finished product.

Prime Costs

The direct costs directly attributable to the manufacture of goods, typically including direct materials and direct labor costs.

Managerial Accounting

A field of accounting that focuses on providing financial and operational information to managers within an organization to aid in decision-making.