In Which of the Following Externality Situations Would It Be

question 65

Multiple Choice

In which of the following externality situations would it be most likely that voluntary agreements could be used to internalize an externality?

• A) littering on highways
• B) overharvesting of alligators in Louisiana
• C) poaching of elephants in Africa
• D) trees of one neighbor blocking a view of another

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Definitions:

Bad Debt Expense

Represents the amount of receivables that a company does not expect to collect and is treated as an expense on the income statement.

Restructuring

The act of reorganizing the legal, ownership, operational, or other structures of a company to make it more profitable or better organized for its present needs.

Principal Amount

The initial size of a loan or bond or the amount of money invested, excluding any interest or profits.

Extended Period

A term used to denote a longer than usual time frame in various contexts, such as payment terms, investment durations, or accounting cycles.