If the Production of a Good Causes an External Cost,then

question 280

Multiple Choice

If the production of a good causes an external cost,then the efficient quantity is

• A) equal to the quantity at which the marginal benefit equals marginal cost.
• B) less than the quantity at which the marginal benefit equals the marginal cost.
• C) more than the quantity at which the marginal benefit equals the marginal cost.
• D) the quantity at which the marginal private benefit is greater than the marginal social benefit.
• E) None of the above answers is correct.

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Definitions:

Maturity Value

The total amount payable to an investor at the end of a fixed-income security's life, including both the principal and interest.

Interest-bearing

Describes a financial instrument or account that generates interest income over time.

Notes Receivable

Claims against debtors documented through promissory notes that promise future payment of money.

Note Receivable

A written promise for the payment of a specified amount of money, with interest, by a set date or on demand to the holder of the note.