When It Is Difficult to Assign and Enforce Property Rights

question 84

Multiple Choice

When it is difficult to assign and enforce property rights,

• A) markets result in outcomes that are often inefficient.
• B) courts can easily negotiate efficient outcomes.
• C) establishing better property rights is always the best way to deal with environmental problems.
• D) government regulation can never improve on the outcomes generated by competitive markets.

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Definitions:

Standard Overhead Rate

The predetermined rate charged for overhead expenses in a standard costing system, based on expected costs and activity levels.

Flexible Overhead Rate

An overhead allocation rate that adjusts for variations in actual activity levels, as opposed to being fixed or static.

Volume Variance

The difference between the expected volume of sales or production and the actual volume, often leading to variations in income or expenses.

Costing Systems

A framework used by organizations to estimate the cost of their products for profitability analysis, inventory valuation, and cost control.