(Consider This) in Response to the Terrorist Attacks of September

question 367

Multiple Choice

(Consider This) In response to the terrorist attacks of September 11, 2001, the government decided to allocate more resources toward defense goods. The government's decision reflects their assessment that

• A) the marginal benefits of additional defense goods outweighed the marginal cost.
• B) the marginal cost of additional defense goods outweighed the marginal benefit.
• C) there cannot be too many defense goods.
• D) civilian goods are not worth producing.

Distinguish between progressive, regressive, and flat tax systems and their impact on taxpayers.

Understand the political and economic debate surrounding the tax treatment of capital gains.

Know how financial statements reflect a company's fiscal health, including equity, net income, and net working capital.

Recognize the implications of different types of sales (cash or credit) on financial statements.

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Definitions:

Product Cost

The total expense incurred to produce and make ready for sale a product, including direct materials, labor, and overhead costs.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision.

Total Expected Cost

A projection of the total costs associated with a project or business activity, including both fixed and variable costs.

Variable Costs

Costs that vary depending on the amount of production or business operations.