Externalities Exist When the Actions of One Agent

question 21

Multiple Choice

Externalities exist when the actions of one agent:

• A) benefit or hurt another agent who is not part of the exchange relationship.
• B) hurts the agent committing the action
• C) benefits the agent committing the action
• D) benefit or hurt another agent who is a part of the exchange relationship

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Definitions:

Costs Of Goods Sold

An accounting term that denotes the direct costs attributable to the production of the goods sold by a company.

Break-even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and a key financial analysis metric for businesses.

Per Month Salary

The amount of monetary compensation provided to an employee by an employer, calculated and paid on a monthly basis.

Gross Profit

The financial profit a company makes after subtracting the costs of producing and selling its products from the revenue generated from sales.