When the Consumption of a Good Generates an External Benefit

question 114

Multiple Choice

When the consumption of a good generates an external benefit,

• A) the private benefit consumers receive from the good will be higher than the true social benefit.
• B) too much of the good will tend to be produced from the viewpoint of economic efficiency.
• C) the community generally suffers an exactly offsetting external cost from the production of the good.
• D) the market demand curve will understate the total benefits derived from consumption of the good, and as a result, too little of it will be produced and consumed.

Understand the impact of first impressions and biases on the hiring process.

Recognize the steps involved in designing and evaluating training and development programs.

Differentiate between internal and external recruiting methods and their implications.

Describe selection techniques and their effectiveness in predicting job performance.

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Definitions:

Carrying Cost

Carrying cost refers to the total cost of holding inventory, which includes warehousing, handling, depreciation, opportunity costs, and insurance.

Carrying Costs

Costs that rise with increases in the level of investment in current assets.

Average Inventory

The mean value of inventory over a certain time period, used for inventory management and planning.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and obsolescence.