Related to the Economics in Practice on Page 3: According

question 86

Multiple Choice

Related to the Economics in Practice on page 3: According to the Economics in Practice, when rural India is suffering from a drought where agricultural output is low, the opportunity cost of having someone out of the labor force, and therefore unable to work in agricultural production, is

• A) high
• B) low.
• C) infinite.
• D) zero, because the person is out of the labor force.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor costs.

Administrative Costs

Expenses related to the general operations of a business that are not directly tied to the production of goods or services.

Direct Material

Raw materials that can be directly traced to the production of a specific product.

Product Costs

Costs that are considered to be directly associated with the production of goods or services, including direct labor, direct materials, and manufacturing overhead.