Consider the Following Problems: Overcrowded Public Highways,overfishing in the Ocean,polluted

question 42

Multiple Choice

Consider the following problems: Overcrowded public highways,overfishing in the ocean,polluted air,and the near-extinction of the wild rhinoceros.What do these problems have in common?

• A) Private markets could easily solve them if governments left the markets alone.
• B) They would all go away if the government sponsored an intensive public-information campaign.
• C) They are all the result of a failure to establish clear property rights over something of value.
• D) They are all the result of a failure of corrective taxes.

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Definitions:

Indirect Labor

Workers who assist in the production process but cannot be directly traced to specific units of product, such as maintenance staff or supervisors.

Variable Cost

Costs that vary directly with the level of production or sales, such as materials and labor.

Direct Labor-Hours

A measure of the time workers spend directly manufacturing a product or providing a service.

Fixed And Variable Cost

Fixed costs are expenses that do not change with the level of production or sales, such as rent, while variable costs fluctuate with production volume, such as materials and labor.