External Costs Are Modeled by Creating a New Social Cost

question 8

Multiple Choice

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.

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Definitions:

Depositor's Account

A financial account held at a bank or financial institution, into which a depositor can deposit and withdraw money.

Debit Memorandum

A document issued by a purchaser and sent to a seller indicating the amount and reasons for deductions in the payment or an increase in the purchaser's debt.

Bank Service Charge

A fee charged by a bank for the maintenance of an account or for processing transactions.

Bank Reconciliation

The process of comparing and adjusting the balance shown in a company's bank statement with the amount shown in the company's own records.