Which of the Following Best Represents an Economic Cost to Society

question 7

Multiple Choice

Which of the following best represents an economic cost to society for decreasing the levels of pollution?

• A) Decreases in pollution levels result in a decreased mortality rate.
• B) The recreational value of our environment is increased with reduced pollution.
• C) Reducing pollution frequently increases the life span of capital goods and leads to decreased maintenance costs.
• D) Programs to reduce pollution often lead to firms' closing plants and putting people out of work.
• E) Recycling solid wastes has reduced communities' garbage collection costs.

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Definitions:

Variable Costing

A costing method where only variable costs (costs that change with production volume) are included in the product cost, excluding fixed costs.

Fixed Manufacturing Overhead

Costs that remain constant regardless of the level of production, such as rent, utility bills, and salaries for certain employees.

Net Profit

The amount of money that remains after all operating expenses, interest, taxes, and preferred stock dividends have been subtracted from a company's total revenue.

Step-Down Method

An accounting technique used to allocate indirect costs to products or services based on a hierarchy of activities.