If an Activity Generates External Costs,the Decision Makers Generating the Activity

question 36

Multiple Choice

If an activity generates external costs,the decision makers generating the activity will:

• A)be faced with its full costs.
• B)be faced with no costs.
• C)not be faced with its full costs.
• D)be faced with excessive costs.

Understand the role of marginal output and marginal physical product in economic analysis.

Understand the concept of Marginal Revenue Product (MRP) and its significance in resource hiring decisions.

Identify the relationship between the demand for resources and the demand for the final product.

Analyze factors influencing the demand for labor and land in various scenarios.

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Definitions:

Receivables

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Allowance Method

An accounting technique to estimate and account for bad debts, where anticipated uncollectible accounts receivable are predicted and recorded.

Uncollectible Receivables

Accounts receivable that cannot be collected from customers, often recognized as a bad debt expense.

Net Realizable Value

The estimated selling price of goods, minus the cost of their sale or disposal.