Statement I.Pollution Is an Example of Market Failure

question 193

Multiple Choice

Statement I.Pollution is an example of market failure.
Statement II.Externalities can be costs or benefits.

• A)Statement I is true and statement II is false.
• B)Statement II is true and statement I is false.
• C)Both statements are true.
• D)Both statements are false.

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Definitions:

Capital Contributions

Investments made by owners or shareholders into a company in exchange for an increase in ownership equity or stock without the need for repayment.

Total Share

The complete amount of stock issued by a company, including all shares currently held by shareholders.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Income Distribution

The way in which total income is shared among the members of an economy.