If the Marginal External Cost of Building a Children's Playground

question 72

Multiple Choice

If the marginal external cost of building a children's playground equals zero,then the
i.marginal private cost equals the marginal social cost.
ii.marginal social cost equals zero.
iii.marginal private cost equals zero.

• A) i only
• B) ii only
• C) iii only
• D) ii and iii
• E) i and ii

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Definitions:

Financing Activities

Transactions with creditors or investors used to fund either company operations or expansions.

Investing Activities

Refers to the purchasing and selling of long-term assets and other investments, not including cash equivalents, which are reported in a company's cash flow statement.

Indirect Method

A cash flow statement approach that adjusts net income for the effects of non-cash transactions and changes in working capital to calculate cash from operating activities.

Accumulated Depreciation

The cumulative total of depreciation costs noted for an asset since it was acquired.