The Federal Aviation Administration Requires Large Commercial Jets to Install

question 18

Multiple Choice

The Federal Aviation Administration requires large commercial jets to install greater amounts of safety equipment than small,private planes.This policy

• A)violates the notion of efficiency because the marginal costs of safety on small planes are smaller.
• B)violates the notion of efficiency because the benefit of one less fatality is the same whether a jet or a small plane is involved.
• C)affirms the notion of efficiency because one fewer commercial jet accident will save more lives than one fewer private plane accident.
• D)affirms the notion of efficiency because airlines can spread the costs out over many tickets.

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Definitions:

Cost of Goods Purchased

The total expenses incurred to acquire inventory that is intended for resale.

Beginning Inventory

The value of a company's inventory at the start of an accounting period, serving as a basis for calculating cost of goods sold.

Specific Identification

An inventory costing method where the cost of each specific item in inventory is identified and assigned to that item.

Actual Costs

Expenses that have been incurred and recorded, contrasting with estimated or projected costs.