When Competition Is Present and Property Rights Secure, People Will

question 41

Multiple Choice

When competition is present and property rights secure, people will be encouraged to

• A) plunder the resources of others.
• B) pay the lowest possible wages.
• C) provide others with things that they value in exchange for income.
• D) Invest in other countries where markets are less competitive and property rights less secure.

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Definitions:

Total Job Cost

The total expense attributed to producing a specific job, including materials, labor, and overhead costs.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to individual units of production based on a chosen activity base.

Machine-Hours

A measure of production volume or activity based on the number of hours machines are operated in the manufacturing process.

Fixed Manufacturing Overhead

Fixed manufacturing overhead consists of the production costs that do not vary with the volume of production, such as rent for the manufacturing facility, salaries of manufacturing managers, and depreciation of factory equipment.