Which of the Following Suggests That Private Markets Can Be

question 448

Multiple Choice

Which of the following suggests that private markets can be effective in dealing with externalities?

• A)the "invisible hand"
• B)the law of diminishing social returns
• C)the Coase theorem
• D)technology policy

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Definitions:

Fixed Cost

Financial obligations that are static and do not vary with production levels or sales numbers, such as rent, salary payments, and insurance fees.

Activity Level

A measure of the volume of production or operations, often used in cost accounting to allocate variable and fixed costs appropriately.

Mixed Cost

A cost that contains both variable and fixed cost elements, making its total expense vary with changes in the level of output.

Fixed Cost

Expenses that do not fluctuate with changes in production volume, staying constant even as production levels vary.