Consider an Industry Producing Good X

question 84

Multiple Choice

Consider an industry producing good X.The quantity of good X produced in a competitive free market will be greater than the socially optimal level if

• A)the production of good X generates a positive externality.
• B)the consumption of good X generates a positive externality.
• C)the production of good X generates a negative externality.
• D)the government has imposed a tax on the production of good X.
• E)good X is a public good.

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Definitions:

Direct Operating Expenses

Costs directly associated with the operation of a business, excluding overhead and administrative expenses.

Miscellaneous Administrative Expenses

Expenses that do not neatly fit into any specific category within general administrative costs, often small or irregular costs that are incurred for running a business.

Service Department Charges

Costs allocated to the various service departments within an organization, such as IT or HR, which support the production departments.

Income from Operations

The earnings of a business from its core operations, excluding revenue and expenses from non-operational activities like investment gains or losses.