A Fundamental Aspect of Public Goods Is That They

question 278

Multiple Choice

A fundamental aspect of public goods is that they

• A) are just like private goods EXCEPT that everybody wants to consume the same amount.
• B) have positive externalities.
• C) are characterized by the principle of rival consumption.
• D) can be consumed jointly by many people simultaneously.

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Definitions:

Relevant Range

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

Variable Cost

Expenses that change in proportion to the volume of goods or services produced by a business.

Activity

An event that causes the consumption of overhead resources in an organization.

Cost Driver

A factor that causes a change in the cost of an activity, such as machine-hours or labor hours, used in determining pricing and profitability.