An Economic Model Is

question 84

Multiple Choice

An economic model is

• A) a small but completely working economy.
• B) a simplified representation of an economic environment.
• C) any graph.
• D) all of the above

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Definitions:

Product Costs

Costs that are directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses that are not directly associated with manufacturing and are charged as costs during the period they occur, including general, selling, and administrative costs.

Variable Cost

A cost that varies with the level of output or sales, such as materials and labor costs.

Fixed Manufacturing Cost

Costs that do not change with the level of manufacturing activity, such as rent for a factory building or salaries of permanent staff.