The Free-Rider Phenomenon

question 19

Multiple Choice

The free-rider phenomenon

• A) becomes increasingly problematic in very large groups.
• B) becomes increasingly problematic in very small groups.
• C) is not affected in any way by the size of the group in question.
• D) is not related to groups in any way because it is an individual-level problem.
• E) makes collective action considerably easier.

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Definitions:

Direct Labour Efficiency Variance

The difference between the expected hours to produce a specific number of units and the actual hours used.

Direct Material Used

Direct material used involves the consumption of raw materials that are transformed into and directly identifiable with the finished product in the manufacturing process.

Variable Manuf. Overhead

Variable manufacturing overhead refers to the indirect costs that change with the level of production, such as utilities for the manufacturing plant.

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain number of units, valued at the standard labor rate.