In Perfect Competition,environmental Externalities Need Not Distort the Allocation of Resources

question 21

Multiple Choice

In perfect competition,environmental externalities need not distort the allocation of resources providing

• A)transactions costs are zero.
• B)average costs are constant for all output levels.
• C)firms install pollution control equipment.
• D)the government sets realistic pollution standards.

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Definitions:

Cash Dividend

A sum of money given by a company to its shareholders, typically from the company's profits.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its useful life.

Indirect Method

A technique used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to calculate net cash from operating activities.

Cash Dividend

A distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders in the form of cash.