A Positional Externality Occurs When

question 22

Multiple Choice

A positional externality occurs when

• A)one person's increase in consumption lowers his neighbor's utility.
• B)one person builds a house which obstructs his neighbor's view.
• C)a polluter positions himself in a crowded city.
• D)a drunk person decides to drive.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to assess the company's worth on paper.

Accounting Loss

The situation where a company's total expenses exceed its revenues, leading to a negative income figure in the financial statements.

Maturity Values

The amount that will be paid to the holder of a financial instrument at the time of its maturity, including principal and any accrued interest.