Which Statement Implies That Smoking Causes a Negative Externality

question 33

Multiple Choice

Which statement implies that smoking causes a negative externality?

• A) Employers lower all wages to account for less productive workers.
• B) Smokers die too early to collect Social Security benefits.
• C) Insurance companies adjust insurance premiums for smoking status.
• D) Income earned by smokers is reduced because they tend to be less productive.

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Definitions:

FIFO Costing Assumption

A method used in accounting that assumes the first items of inventory purchased are the first ones sold.

Specific Identification Method

The specific identification method is an approach to inventory valuation that tracks the cost of individual items or groups of similar items.

Inventory Costing

The method of accounting that assigns costs to inventory, typically involving the calculation of costs of goods sold and ending inventory values.

High-Unit Cost

The condition of having a high cost per unit of product, often due to expensive inputs or inefficient production.