Engaging in an Activity Until Marginal Benefits Equal Marginal Costs

question 27

Multiple Choice

Engaging in an activity until marginal benefits equal marginal costs is known as

• A)the diminishing marginal returns
• B)the diminishing marginal utility
• C)the marginal decision rule
• D)the marginal utility rule

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Definitions:

CCA Depreciation

Capital Cost Allowance, a system in Canada that determines how a business can claim depreciation on tangible capital assets for tax purposes.

FIFO

"First In, First Out," an accounting method for valuing inventory where the oldest items are sold first.

Straight-Line

A method of calculating depreciation of an asset which assumes the asset will lose an equal amount of value each year.

Sunk Cost

Costs that have already been incurred and cannot be recovered or changed, and thus should not affect future business decisions.