Setting Taxes Equal to Marginal External Costs Are Modeled by Creating

question 63

Multiple Choice

Setting taxes equal to marginal external costs are modeled by creating a new social cost curve that is

• A)lower than the original supply curve.
• B)higher than the original supply curve.
• C)lower than the original demand curve.
• D)higher than the original demand curve.

---

Definitions:

Amortization Expense

The systematic allocation of the cost of an intangible asset over its useful life.

Book Value

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

Disposal

Disposal refers to the act of selling, discarding, or removing an asset from a company's balance sheet, often due to obsolescence, excess, or replacement.

Long-Lived Asset

A long-lived asset is a tangible or intangible asset with a useful life of more than one year, used in the operating activities of a business, such as buildings, machinery, or patents.