Negative Externalities Occur When One Person's Actions

question 138

Multiple Choice

Negative externalities occur when one person's actions:

• A)cause another person to lose money in a stock-market transaction.
• B)cause his or her employer to lose business.
• C)adversely affect the wellbeing of a bystander (or bystanders) who is (are) not party to a market exchange.
• D)reveal his or her preference for foreign produced goods.

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Definitions:

Insurance Expense

The cost incurred by a business to purchase insurance, which provides financial protection against losses.

Unexpired Insurance

Portion of insurance premiums paid that has not yet been used as of a specific date, and is considered a current asset on the balance sheet.

Accounts Receivable

Financial obligations that customers or clients have to a company for products or services provided but not yet compensated for.

Fees Earned

Income received from providing services.