The Advantage of Using Command and Control to Solve an Externality

question 36

Multiple Choice

The advantage of using command and control to solve an externality problem is that:

• A) it is inflexible, and some problems require an inflexible approach.
• B) it is a very flexible approach.
• C) it solves the problem efficiently without the government requiring very much information.
• D) it is usually the least costly approach.

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the sum of the fair value of its identifiable tangible and intangible assets and liabilities.

Internally Generated

Refers to assets or resources that are created or produced within a company, rather than acquired from external sources.

Straight-Line Method

A method of calculating depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.

Residual Value

The estimated value that an asset will have at the end of its useful life, also known as salvage value.