Use the Figure Below to Answer the Following Questions

question 73

Multiple Choice

Use the figure below to answer the following questions.

Figure 16.3.3
-Refer to Figure 16.3.3. The figure shows the marginal private benefit and marginal social cost of a university education. If society's external benefit from university graduates is $10,000 each, then the

• A)marginal social cost curve lies $10,000 to the left of the private marginal benefit curve.
• B)marginal social cost curve lies $10,000 to the right of the private marginal benefit curve.
• C)marginal social benefit curve lies $10,000 below the private marginal benefit curve.
• D)marginal social benefit curve lies $10,000 above the private marginal benefit curve.
• E)marginal social benefit curve is horizontal.

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Definitions:

Capacity Utilization

A measure of how effectively an entity is using its production or operational capacity.

Budgeted Factory Overhead

The expected or estimated overhead costs for a factory within a certain period, typically used for planning and control purposes.

Budgeted Fixed Overhead

The predetermined estimate of the total fixed costs required to produce a specific amount of output over a fixed period.

Budgeted Variable Overhead

Estimated costs that vary with production volume, such as utilities or raw materials, not directly tied to labor or capital.