If There Is No Scarcity

question 36

Multiple Choice

If there is no scarcity,

• A) choices are no longer rational.
• B) the opportunity cost of an action would be greater than its sunk cost.
• C) all marginal benefits would equal zero.
• D) an action would have zero opportunity cost.
• E) the marginal cost of an action is greater than its marginal benefit.

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Definitions:

Actual Overhead Costs

The real expenses incurred for indirect materials, labor, and other costs that are not directly tied to the production of goods or services.

Predetermined Overhead Rate

The predetermined overhead rate is calculated by dividing estimated total overhead costs by an estimated allocation base, used to allocate overhead to products or job orders.

Direct Labour-Hours

A measure of the labor time worked directly on specific jobs or products.

Work in Process

Inventory that represents partially completed goods which are still in the production process.