When a Production Externality Has a Beneficial Effect on a Bystander

question 120

Multiple Choice

When a production externality has a beneficial effect on a bystander at the market equilibrium:

• A) society is unlikely to benefit from production subsidies
• B) the social cost of production is less than the private cost
• C) the private benefit from consumption is less than the social cost of production
• D) none of the above is true

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Definitions:

Financial Condition

Refers to the current state of a company's financial health and stability, often assessed through analyzing balance sheets, income statements, and cash flow statements.

Par Value

The nominal or face value of a security or stock as stated by the issuing company, which might not reflect its market value.

Book Value

The value of an asset according to its balance sheet account balance, which is the cost of the asset minus any depreciation, amortization, or impairment costs made against the asset.