For a Common Resource, the Marginal Private Cost Curve Slopes

question 26

Multiple Choice

For a common resource, the marginal private cost curve slopes _______ and the marginal social cost curve slopes _______.

• A) downward; upward
• B) upward; downward
• C) downward; downward
• D) upward; upward

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Definitions:

Direct Labor

The wages and benefits paid to employees who are directly involved in the production of goods or delivery of services.

Direct Materials

Raw materials that are directly traceable to the production of goods, considered a variable cost.

Fixed Overhead

Indirect costs or expenses that remain relatively constant regardless of the level of production or business activity.

Variable Overhead

Costs that vary with production levels, such as utilities or materials, which do not remain fixed over time.