A Negative Externality Is a Situation in Which

question 273

Multiple Choice

A negative externality is a situation in which

• A) there is a spillover of benefits.
• B) a cost associated with an economic activity is borne by a third party.
• C) a firm is paying in excess of the total costs of producing a good.
• D) none of the above.

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Definitions:

Article 9

A provision within the Uniform Commercial Code (UCC) that governs secured transactions involving personal property, creating a framework for securing debts and financing statements.

Equipment

Tangible property or tools that are used in the process of producing goods or providing services.

Bankruptcy Trustee

An appointed individual responsible for managing the estate of a debtor during bankruptcy proceedings, including assets distribution to creditors.

Security Interest

An enforceable legal claim or lien on collateral that has been pledged, usually to obtain a loan, ensuring the right to seize said collateral if the loan is not repaid.