When External Benefits Are Significant

question 219

Multiple Choice

When external benefits are significant:

• A) market output is too low.
• B) market output is too high.
• C) market output is at the efficient level.
• D) social surplus is maximized.

Appreciate the public's demand for ethical and socially responsible management in organizations.

Understand the concept of ethical dilemmas and their sources.

Analyze alternative views of ethical behavior and strategies to maintain high ethical standards in organizations.

Understand the importance of complying with legal responsibilities within an organization.

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Definitions:

Output

The amount of goods or services produced by a person, machine, business, or industry.

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs dilute as production increases.

Average Total Costs

The total cost of production divided by the number of units produced, reflecting the average cost per unit.

Total Variable Cost

The total of all costs that vary with output level, including materials, labor, and other expenses that increase as production increases.