External Costs Occur When

question 144

Multiple Choice

External costs occur when

• A) the costs of producing a product are private costs.
• B) there are neither harmful nor beneficial spillovers associated with the production of a product.
• C) the costs of producing a product are greater than the benefits derived from it.
• D) a product is produced at the least cost per unit.
• E) there is a difference between the costs to society and the private costs of producing a product.

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Definitions:

Compensation Mix

The variety of compensation components, such as salary, bonuses, stock options, and benefits, used by an employer to reward employees.

Goal-sharing Plans

Employee incentive programs where rewards are based on the collective achievement of specific organizational goals, encouraging team collaboration.

Bonus Payouts

Additional financial compensation awarded to employees beyond their normal salary, often tied to performance or company profitability.

Employee Participation

The involvement of employees in the decision-making processes of an organization to increase engagement and productivity.