Suppose That All the Necessary Conditions Exist for the Realization

question 42

Multiple Choice

Suppose that all the necessary conditions exist for the realization of equal wage rates in every labor market, but that currently the wage rate in market X is higher than the wage rate in market Y. We expect that eventually the wage rate

• A)in market X will increase more.
• B)in market Y will decrease.
• C)in market X will decrease and the wage rate in market Y will increase.
• D)will not change in either market, because something out of the ordinary must have caused the wage rates in the two markets not to be equal.
• E)a and b

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Definitions:

Overhead Volume Variance

A measure of the difference between the estimated and actual overhead costs, due to changes in production volume.

Controllable Costs

Expenses that a manager or business can influence or regulate, such as marketing costs or raw material purchases.

Fixed Costs

Business expenses that remain constant regardless of production volume, such as rent or salaries.

Total Overhead Variance

The difference between the actual overhead costs incurred and the standard or budgeted overhead costs anticipated for a particular period.