Markets Are Often Inefficient When Negative Externalities Are Present Because

question 507

Multiple Choice

Markets are often inefficient when negative externalities are present because

• A)private costs exceed social costs at the private market solution.
• B)externalities cannot be corrected without government regulation.
• C)social costs exceed private costs at the private market solution.
• D)production externalities lead to consumption externalities.

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Definitions:

Sales Tax

A tax levied by the government on the sale of goods and services.

Credit Sales

Credit sales are transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Liability Classification

The process of categorizing liabilities on the balance sheet as either current (due within one year) or long-term.

Short-Term Obligation

A debt or other financial obligation that is due to be paid within one year or within the entity's operating cycle if longer.