Which of the Following Is Most Likely to Give Rise

question 150

Multiple Choice

Which of the following is most likely to give rise to a positive externality?

• A) A sudden increase in the price of oil due to a supply shock
• B) A decrease in the price of barley due to a good harvest
• C) Deforestation leading to the extinction of many species
• D) The consumption of a drug to cure a communicable disease

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Definitions:

Activity Overhead Rates

Rates used to allocate overhead costs to products or services based on specific activities driving the overhead expenses.

Cost Pools

Groupings of individual costs based on their shared function or similarity, used in the allocation of costs to products or services.

ABC Systems

Activity-Based Costing systems, which allocate overhead costs based on the activities that drive those costs, providing more accurate cost information.

Cost Drivers

Factors that cause the cost of an activity or process to change, used in strategic management to control and reduce costs.