Which of the Following Provides the Most Reasonable Explanation for Why

question 26

Multiple Choice

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

• A) Without the farm subsidies, food shortages would result.
• B) Subsidies promote the efficient use of agricultural resources.
• C) Agricultural interests seek a redistribution of income favoring themselves.
• D) The price support programs reduce food costs, which helps the poor.

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Definitions:

Cost Category

A classification of costs based on their nature or function within a business, often used for accounting and budgeting purposes.

Step-Down Method

The step-down method is a cost allocation approach used in accounting, which assigns overhead costs to various departments in steps, based on specified allocation bases.

Operating Departments

The divisions within a company where the primary functions related to the production of goods or provision of services are carried out.

Direct Method

An accounting approach used to allocate service department costs directly to producing departments without considering services rendered between service departments.