Which of the Following Statements Is True

question 142

Multiple Choice

Which of the following statements is true?

• A)When the forces of supply and demand determine for whom goods are produced in a society,an equitable distribution of income will naturally result.
• B)An external cost will occur when some of the benefits derived from production of some good or service are enjoyed by a third party.
• C)One of the roles of our government is to transfer some income from the rich and the middle class to the poor.
• D)According to most economists' definition of competition,the American economy is very competitive.

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Definitions:

Variable Maintenance Cost

Costs for maintenance that fluctuate with the level of operation or production activity.

Machine-Hours

A unit of measure representing the operational time of a machine, used as a basis for allocating manufacturing overhead in traditional costing systems.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behaviors are valid.

Gross Margin

A company's net sales revenue minus its cost of goods sold (COGS), expressed as a percentage. It reveals how much profit a company makes before expenses.