One Result of the Application of Absolute Liability in Some

question 50

Multiple Choice

One result of the application of absolute liability in some product-liability cases is that

• A) there is no incentive to start pharmaceutical businesses in places that apply this concept.
• B) consumer groups have extended the application of this concept to nearly every aspect of consumerism.
• C) some firms need to deal with major uncertainties in their production processes.
• D) business associations that span several jurisdictions have taken up the major burden of litigating most product-liability lawsuits.

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Definitions:

Book Income

The income reported by a company in its financial statements, differing from taxable income due to various adjustments.

Life Insurance Premiums

Regular payments made to an insurance company to maintain a life insurance policy.

Permanent Difference

Items that cause a difference between the tax base of assets or liabilities and their carrying amount in financial statements, affecting taxable income or taxes payable.

Deferred Tax Asset

An accounting term for items that will reduce future tax payments, such as carryover losses or credits.