An Economic Agent ________ When He Accounts for the Full

question 96

Multiple Choice

An economic agent ________ when he accounts for the full costs and benefits of his actions.

• A) is called a free rider
• B) internalizes an externality
• C) maximizes his profit
• D) is called a rent seeker

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Definitions:

First-in

A term often used to describe inventory valuation methods, implying the first items produced or purchased are the first sold.

Materials

Raw substances or components that are used in the manufacturing process to produce goods.

Processing Cost

This is the expense incurred during the operation of converting raw materials into finished products, including labor and overhead costs.

Work in Process

Inventory that includes the materials, labor, and overhead costs for products that are in the production process but not yet complete.