An Externality Is a Cost or Benefit Arising from an Economic

question 75

Multiple Choice

An externality is a cost or benefit arising from an economic activity that falls on

• A)consumers but not producers.
• B)producers but not consumers.
• C)consumers or producers.
• D)someone other than consumers or producers.
• E)none of the above.

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Definitions:

Work in Process Inventory

Items in a manufacturing process that are partially completed but not yet finished goods.

Raw Materials Used

The quantity of basic materials and components consumed in the production process to manufacture goods.

Finished Goods Inventory

Inventory of finished goods awaiting sale but not yet purchased by customers.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor costs.