Which of the Following Is an Example of an Overhead

question 28

Multiple Choice

Which of the following is an example of an overhead in a company?

• A) Cost of maintaining a vending machine in the break room
• B) Cost of instruments needed for production
• C) Basic salary paid to every employee
• D) Bonus amounts paid to the higher-level management

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Common Resource

A resource like air or water that is non-excludable and rivalrous, meaning it's impossible to prevent anyone from using it, but one person's use diminishes another person's ability to use it.

Nonexcludable

A nonexcludable good is one where it is not possible to prevent people who have not paid for it from having access to it, typical in public goods.

Marginal Social Benefit

The additional benefit received by society as a whole from consuming one more unit of a good or service.