Answer: Precision journal $
Oct 1,2018
1. Bank Dr 41m
Midwest Bank Cr. 41m
Narration. Issuance of promissory note of $41m, 9% , 1yr promissory note to Midwest for loan.
Dec 31 2018
2. Loan interest Dr 922,500
Midwest Bank Cr 922,500
Narration. Interest due on promissory note of 41m 9% 1 year promissory note as at date.
September 30,2019
Midwest Bank Dr 44,690,000
Bank.Cr. CR 44,690,00
Narration. Payment of 41m, 9 % , 1 yr promissory note to Midwest maturity.
If there are positive externalities involved with the delivery or consumption of a product, the level of output will be less than the efficient amount of production.
Answer: Option C
<u>Explanation:</u>
Externality means the result or the consequences of the activities which affect some third parties also. But this does not get reflected in the market prices. Positive externality means that the third party gains benefits from the activities related to externalities.
But in this case there is always under production that is the production which is less than efficient amount of production. The reason for this is that the producers of these goods can not capture the extra value of the goods that the third parties get in the form of the prices of that good.