When a factory dumps toxic waste into a river and pollutes the river, the costs borne by society in order to clean up the mess is called a(n):

A. externality.
B. internal diseconomy.
C. internal economy.
D. natural monopoly.

Answer: A. externality.

Business

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A(n) ________ is made on the spur of the moment without any planning or search effort

A) high-involvement purchase B) commodity purchase C) impulse purchase D) unsought purchase E) fast-moving purchase

Business

Modigliani and Miller (M&M) Proposition I states:

A) overall market value of the firm = market value of equity - market value of debt. B) overall market value of equity = market value of the firm+ market value of debt. C) overall market value of the firm = market value of equity + market value of debt. D) overall market value of debt = market value of equity + market value of the firm.

Business