An Externality Is Any Activity for Which an Individual Firm

question 6

Multiple Choice

An externality is any activity for which an individual firm or consumer does NOT take into account all

• A)associated costs and benefits.
• B)of the ramifications of its actions on others.
• C)negative impacts on the economy.
• D)associated costs.
• E)associated benefits.

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Definitions:

Split-off Point

The stage in a production process where joint products are physically separated and can be further processed or sold.

Processed Further

Processed Further describes materials or products that undergo additional manufacturing or development stages to add value before final sale.

Manufacturing Cycle Efficiency

A measure of the efficiency of the production process, calculated as the ratio of value-added time to the total cycle time.

Non-value-added Time

Time that does not contribute directly to the final value or quality of the product or service, often seen as a target for reduction in process improvement efforts.