Which of the Following Is an Example of Spending on Goods

question 175

Multiple Choice

Which of the following is an example of spending on goods and services in the circular flow model?

• A)Micah purchases a new wrench for his auto repair business.
• B)Chester buys a first-class ticket from Atlanta to London for his long-awaited vacation.
• C)Toby buys a new lawn mower to use in his lawn care business.
• D)Lily purchases a new massage table for use in her therapy center.

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Definitions:

Societal Costs

Expenses borne by society as a whole, resulting from business operations or economic policies, including environmental damage and health impacts.

Private Cost

Expenses borne by individuals or enterprises as a result of their own production or consumption decisions, not including externalities.

Contingent Environmental Costs

Costs that may occur depending on the outcome of a future event related to the environment, such as cleanup costs for pollution or fines for non-compliance with environmental regulations.

Relationship and Image Costs

Expenses incurred to build and maintain relationships with customers and to enhance the company's image and brand.