An Example of Operating Costs of a Long-Lived Asset Would

question 170

Multiple Choice

An example of operating costs of a long-lived asset would NOT include the following.

• A) insurance costs paid after the asset is being used in operations
• B) maintenance costs
• C) repair costs
• D) insurance costs paid before the asset is being used in operations

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Definitions:

Allocative Efficiency

A state of the economy in which the distribution of resources among different uses is optimized, leading to an optimal level of consumer satisfaction.

Productive Efficiency

A situation in which an economy or entity is operating at maximum capacity, producing goods or services at the lowest possible cost.

Long-Run Equilibrium

A state in economics where all factors of production and outputs in an industry or market adjust fully to any changes, leading to a stable condition where no participant has an incentive to change behavior.

Spillovers

Economic events in one context that have effects on a third party or in a different context, often external to the initial economic activity.