Costs for Which of the Following Activities Should Not Be

question 46

Multiple Choice

Costs for which of the following activities should not be included in research and development (R&D) ?

• A)modification of the formulation or design of a product or process
• B)design of tools, jigs, molds, and dies involving new technology
• C)design, construction, and testing of preproduction prototypes and models
• D)trouble-shooting in connection with breakdowns during commercial production

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Definitions:

Market Failure

A circumstance where the distribution of goods and services through an unregulated market fails to be efficient, frequently resulting in a decrease in overall social welfare.

Externalities

Expenses or advantages impacting individuals who did not decide to bear those expenses or advantages.

Public Goods

Goods or services that are available to all members of a society, typically provided by the government, with no one excluded from benefitting.

Efficient Mix

The most advantageous combination of goods and services that can be produced and distributed with the available resources and technology, maximizing overall welfare.