When External Benefits Exist, Which of the Following Can Produce

question 52

Multiple Choice

When external benefits exist, which of the following can produce the efficient amount of output? I. vouchers
II) private subsidies
III) taxes
IV) marketable permits

• A) I and II only
• B) I and III only
• C) II and IV only
• D) III and IV only

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Definitions:

Budgeted Net Income

An estimate of a company's future net income over a specific period based on projected revenues and expenses.

December

The twelfth and final month of the year in the Gregorian calendar, often associated with end-of-year activities and holidays.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested in the business or used to pay off debt.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.