Exhibit 18-6 Multiple Choice

question 104

Multiple Choice

Exhibit 18-6
Multiple Choice
-According to the data in Exhibit 18-6, the GDP deflator in 2016 (the base year) was

• A) 1.28.
• B) 1.25.
• C) 1.
• D) .8.
• E) 1.30.

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Definitions:

Incremental Costs

The additional costs incurred when producing an additional unit of a product or service.

Fixed Manufacturing Costs

Costs that do not change with the level of production, such as rent, salaries, and insurance, which are incurred regardless of output volume.

Full Capacity

The maximum level of output that a company can sustain to make a product or provide a service.

Incremental Revenue

The additional revenue generated from a new business activity or decision.