Which of the Following Activities Entails an External Cost

question 73

Multiple Choice

Which of the following activities entails an external cost?

• A)Bob chooses engineering as a major because engineers earn more than other professionals.
• B)Sarah gets in her car and drives to the beach.
• C)Tom paints the walls of his room.
• D)Victoria purchases tomatoes from the local grocery store.

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Definitions:

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific segment of the business and would be eliminated if the segment ceased operations.

Percentage Change

A calculation that shows how much a quantity has increased or decreased in percentage terms over a period.

Traceable Fixed Expense

Fixed costs that can be directly associated with a specific product, department, or segment of a business.

Net Operating Income

A company's income after all operating expenses, excluding taxes and interest, have been deducted from total revenue.