When Does a Negative Externality Exist

question 66

Multiple Choice

When does a negative externality exist?

• A)When there are quantity controls in a market
• B)When there are price controls in a market
• C)When the marginal social cost of producing a good or service exceeds the private cost
• D)When the marginal private cost of producing a good or service exceeds the social cost

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Definitions:

Audit Committee

In corporation law, a committee of the board that recommends and supervises the public accountant who audits the corporation’s financial records.

Executive Committee

A subgroup of an organization's board or leadership that makes key decisions between full board meetings or manages certain aspects of the organization's operations.

Corporate Profits

The surplus income of a corporation after all operating expenses, including taxes and interest on debt, have been deducted from total revenue.

Socially Responsible

Acting with consideration for the impact on society and the environment, often associated with ethical business practices.