A Negative Externality

question 292

Multiple Choice

A negative externality

• A)is an adverse impact on a bystander.
• B)causes the product in a market to be under-produced.
• C)is an adverse impact on market participants.
• D)is present in markets where the good or service does not have any impact on bystanders.

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Definitions:

Step-down Method

A method used in cost accounting to allocate overhead costs to specific products or services in a hierarchical manner.

Training Department

A division within an organization focusing on the development of employees' skills and knowledge through various training programs.

Machining Department

A division within a manufacturing facility where machining processes such as cutting, shaping, and finishing of materials are carried out.

Volume Based Cost Drivers

Factors that cause the costs of an activity to increase or decrease with changes in the volume of production or services provided.