An Negative Externality Is Present Whenever

question 71

Multiple Choice

An negative externality is present whenever:

• A)​the private marginal cost of an activity exceeds the private marginal benefit.
• B)​the private marginal benefit of an activity exceeds the private marginal cost.
• C)​the social marginal cost of an activity exceeds the private marginal cost.
• D)​none of the above

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Definitions:

Closely Held Corporation

A company whose shares are owned by a small number of shareholders, often involving family or close associates.

Financial Statements

Documents that provide an overview of a company's financial condition, including its income, expenses, profit, and assets.

Responsible Party

The individual or entity legally obligated or liable for something, particularly in the context of a legal contract or wrongful act.

Standard of Care

The degree of prudence and caution required of an individual who is under a duty of care, often defined by the legal standard to avoid or minimize risk.