Which of the Following Statements Are Assumptions Underlying Cost Estimation

question 43

Multiple Choice

Which of the following statements are assumptions underlying cost estimation?

• A) Cost behaviour depends on one or a few activities.
• B) All costs are production driven.
• C) There is a strong correlation between the cost and the cost driver.
• D) Cost behaviour depends on one or a few activities AND there is a strong correlation between the cost and the cost driver.

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Definitions:

Government Intervention

The involvement by government in the market to influence the allocation of resources and distribution of income.

Coase Theorem Solution

A theory suggesting that if trade or negotiation over property rights is allowed without cost, parties can reach an agreement regarding the allocation of resources regardless of the initial allocation.

Mutually Agreeable

A situation or outcome in negotiations or agreements that all parties involved accept and are satisfied with.

Cap-And-Trade

An environmental policy tool that aims to reduce pollutants by setting a limit (cap) on emissions and allowing companies to buy and sell permissions (trade) to emit up to a certain limit, incentivizing pollution reduction.