Sue and Mark Are the Only Two Members of a Community

question 37

Multiple Choice

Sue and Mark are the only two members of a community. Sue's marginal benefit from one lighthouse is $2,000 and Mark's marginal benefit is $1,000. If the marginal cost of one lighthouse is $2,500 and if a lighthouse is a public good, then for efficiency the lighthouse should

• A) be built, but only Sue should be allowed to use it.
• B) be built, but only Mark should be allowed to use it.
• C) not be built because its marginal cost exceeds Sue's marginal benefit.
• D) not be built because its marginal cost exceeds both Sue's and Mark's marginal benefit.
• E) be built and both Sue and Mark should be allowed to use it.

Define and calculate prime costs and understand their significance in manufacturing.

Distinguish between opportunity costs, sunk costs, and how they relate to decision-making.

Calculate the cost of goods manufactured and understand its impact on inventory and financial statements.

Understand and identify components of manufacturing overhead.

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Definitions:

Piercing The Corporate Veil

Holding a shareholder responsible for acts of a corporation due to a shareholder’s domination and improper use of the corporation.

Promote Justice

The act of advocating for fair treatment and equal rights within legal, societal, or institutional contexts.

Shareholders

Individuals or entities that own shares in a corporation, making them partial owners and entitling them to potential dividends and certain rights within the corporation.

Looting

The act of stealing goods, typically during a war or riot.