Which of These Consumption Activities Is Most Likely to Cause

question 146

Multiple Choice

Which of these consumption activities is most likely to cause an external cost?

• A)an executive plays a vigorous game of golf
• B)a student in a flat plays her CDs at 120 decibels late at night
• C)a young mother exercises to an aerobics video
• D)a construction worker eats a sandwich during the lunch break

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Definitions:

Static Budget

A financial plan that does not change or adjust with variations in business activity levels.

Labor Rate Variance

The difference between the actual cost of direct labor and its expected (or standard) cost during a given period.

Standard Rate

A predetermined cost per unit of measure or rate that is used in budgeting and costing calculations.

Actual Rate

The real, observed rate at which something occurs, often used in financial contexts to specify interest rates or exchange rates.