Which of the Following Is an Example of an Externality

question 63

Multiple Choice

Which of the following is an example of an externality?

• A)Annie purchases a new dress.
• B)Antonio's dog barks loudly during the night,waking his neighbors.
• C)Harold sells a book to Cathy,who reads the book and then gives it to James as a gift.
• D)Gloria watches a scary movie.

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Definitions:

Fixed Expenses

Costs that do not change in total despite changes in the volume of goods or services produced or sold, such as rent or salary expenses.

Volatility

This refers to the degree of variation of a trading price series over time, typically measured by the standard deviation of logarithmic returns.

Net Income

Net Income is the total earnings of a company after all expenses and taxes have been subtracted from total revenue, indicating profitability.

Contribution Margin Ratio

A measure that indicates the percentage of each sales dollar that contributes to covering fixed costs and generating profit.