Claudia Went to a Department Store to Buy a Few

question 7

Multiple Choice

Claudia went to a department store to buy a few things for her new house.She found that several items in the store were on discount and decided to make the most of the deals offered.However,when she started using the things that she bought on discount,she realized that many of them were defective.This happened because of the presence of ________.

• A) positive externalities
• B) negative externalities
• C) asymmetric information
• D) the moral hazard problem

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Definitions:

Activity-Based Costing System

A refined method of allocating costs to products or services based on activities that drive costs, enhancing accuracy in costing.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services by identifying cost drivers.

Order Processing

The sequence of steps taken by a company to fulfill a customer order, from order receipt to delivery, including invoicing and shipment.

Idle Capacity

Unused or underused production capacity, where the facility is capable of producing more but is not due to lack of demand or other factors.