When There Are Significant Costs Involved with Coordinating a Private

question 71

Multiple Choice

When there are significant costs involved with coordinating a private solution to an externality:

• A)it likely will not happen.
• B)a leader will likely be elected to organize the coordination.
• C)it can act as a motivating factor to solve the externality problem expediently.
• D)None of these statements is true.

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Definitions:

Cash Payments

Outflows of cash to settle obligations or purchase goods and services as part of business operations.

Accounts Payable Turnover Ratio

A financial metric used to analyze how quickly a company pays off its suppliers by comparing net credit purchases to the average accounts payable during a period.

FICA

The Federal Insurance Contributions Act (FICA) is a U.S. law that mandates a payroll tax on both employees and employers to fund Social Security and Medicare programs.

Social Security

A government program that provides financial benefits to retirees, disabled workers, and their families.