Answer:
d
Explanation:
A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low
Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality.
Answer:
Aggregate demand curve would shift to the right is the correct answer.
Explanation:
The answer is <u>"Oligopoly".</u>
Oligopoly is a market structure with few firms, none of which can shield the others from having huge impact. The focus proportion estimates the piece of the overall industry of the biggest firms. An imposing business model is one firm, duopoly is two firms and oligopoly is at least two firms. There is no exact maximum breaking point to the quantity of firms in an oligopoly, however the number must be low enough that the activities of one firm altogether impact the others.
Answer:
The statement is: False.
Explanation:
The cost of borrowing money is the Interest Expense. On an Income Statement, interest expense is shown as a non-operating expense. Tax expense represents the total amount of taxes an individual or organization is responsible for. On an Income Statement, tax expenses are recorded as tax payable.
<em>Neither interest expense nor income tax expense is considered in the general or administrative budget since they are complicated to estimate because both of them rely on the actual production of the firm during the course of its operations.</em>
