Those Opposed to Fracking, a Method of Extracting Natural Gas

question 14

Multiple Choice

Those opposed to fracking, a method of extracting natural gas through breaking up underground rocks with chemicals and water, warn that this method might pollute nearby sources of drinking water.
-If this pollution occurs, the market equilibrium with no government intervention extracts ________ natural gas than the efficient quantity and ________ a deadweight loss.

• A) less; does not create
• B) more; does not create
• C) less; creates
• D) more; creates

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Definitions:

Tangible Asset

Physical assets that can be touched and have a finite monetary value, such as buildings, machinery, and equipment.

Property, Plant, Equipment

Property, plant, and equipment (PP&E) are long-term tangible assets that are used in the operations of a business and are subject to depreciation.

Disposal

The process of disposing an asset by selling, exchanging, retiring it, or by destroying it.

Sale

A transaction between two parties where the buyer receives goods, services, or assets in exchange for money or other consideration.