In the Case of a Technology Spillover, the Government Can

question 54

Multiple Choice

In the case of a technology spillover, the government can encourage firms to internalize a positive externality by

• A)taxing production, which would decrease supply.
• B)taxing production, which would increase supply.
• C)subsidizing production, which would decrease supply.
• D)subsidizing production, which would increase supply.

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Definitions:

Labor Price Variance

The difference between the actual cost of direct labor and the standard cost, reflecting the variance in wages paid.

Direct Material Cost

The cost of raw materials and components that are directly used in the production of a product.

Labor Quantity Variance

The difference between the actual hours worked and the standard hours allowed for the work performed, multiplied by the standard hourly wage rate.

Produced

The completed output of goods or services as a result of manufacturing or production processes.