After the Implementation of the Congestion Tax in London, Traffic

question 91

Multiple Choice

After the implementation of the congestion tax in London, traffic volume was reduced and travel time for cars and buses was cut in half. This is an example of

• A) responding to incentives.
• B) the role of pricing in allocating resources.
• C) caveat emptor.
• D) comparative advantage.

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Definitions:

Sales Commissions

Payments made to sales employees or agents based on the sales volume they achieve.

Factory Overhead

Factory overhead encompasses all indirect costs associated with the manufacturing process, including utilities, maintenance, and management salaries.

Amortization

The periodic transfer of the cost of an intangible asset to expense or of a bond discount to interest expense.

Prime Cost

The direct costs of manufacturing a product, which include the raw materials and direct labor expenses.