A Negative Externality Exists Whenever

question 166

Multiple Choice

A negative externality exists whenever

• A) there are no internal costs.
• B) production of a good creates an external cost.
• C) production of a good creates an external benefit.
• D) production of a good has no social cost.
• E) production of a good has no social benefit.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that aim to make financial statements comparable across international boundaries.

Liabilities

Liabilities represent obligations that a company owes to external parties, which might include loans, accounts payable, and other debts.

Working Capital

The measure of a company's operational efficiency and short-term financial health, calculated as current assets minus current liabilities.

Financial Statements

Reports that provide information about a company's financial condition including income, expenses, and net worth.