-Refer to Figure 15-4

question 63

Multiple Choice

-Refer to Figure 15-4. Why is there a deadweight loss?

• A) because the marginal social cost of producing each additional unit in excess of Q₂ exceeds the marginal benefit
• B) because the marginal private cost of producing each additional unit in excess of Q₂ exceeds the marginal benefit
• C) because the marginal social benefit of producing each additional unit in excess of Q₂ exceeds the private cost
• D) because the marginal private benefit of producing each additional unit in excess of Q₂ exceeds the social cost

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Definitions:

Wages Expense

The total cost incurred by a company for the payment of wages to its employees during a specific period.

Adjusting Entry

Financial records prepared at the close of an accounting timeframe to attribute profits and outlays to the specific period in which they happened.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting how much of the asset's value has been used up over time.

Fixed Asset

Long-term tangible property, plant, or equipment that a firm owns and uses in its operations to generate income.