The Case in Point on Preventing Oil Spills Stated That

question 19

Multiple Choice

The Case in Point on Preventing Oil Spills stated that an economist who studied the costs and benefits of preventing oil spills in coastal waters and rivers concluded that:

• A) the marginal cost of preventing oil spills was greater than the marginal benefit and the U.S.Coast Guard could not justify its excessive prevention efforts.
• B) The marginal cost of preventing oil spills was less than the marginal benefit and that the U.S.Cost Guard could justify even greater efforts at preventing them.
• C) that oil spills are so terrible and have such a pervasively destructive impact on the coastal waters and rivers that they should be prevented entirely-no oil spills should be tolerated.
• D) both B and C were conclusions reached by the economist.

---

Definitions:

Discounting Note

A financial practice where a note or bill is sold to a third party before its maturity date for less than its face value, allowing the seller to access funds earlier.

Discounted Note

A promissory note sold for less than its face value, which will be worth its full value upon maturity; used as a form of short-term financing.

Interest Expense

This is the cost incurred by an entity for borrowed funds, reflected as an expense on the income statement.

Adjusting Entry

A record entered at the conclusion of an accounting cycle to assign revenues and expenses to the appropriate period.