The Costs That Should Be Included in an Outsourcing Decision

question 144

Multiple Choice

The costs that should be included in an outsourcing decision are the

• A)sunk costs.
• B)recurring costs.
• C)relevant costs.
• D)fixed costs.

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Definitions:

External Cost

Uncompensated costs that individuals or firms impose on others outside of market transactions, often associated with pollution.

Pollution Tax

A financial charge imposed on the emission of pollutants, intended to motivate reductions in harmful environmental discharges.

Unit of Production

A single complete item or a specified amount of a commodity produced.

Positive Externality

An economic situation where a third party benefits from a transaction or activity they are not directly involved in.