Economists Think That People Are Self-Interested

question 25

Multiple Choice

Economists think that people are self-interested:

• A) only when monetary incentives are present.
• B) because they respond to incentives in predictable ways.
• C) only rarely in response to incentives.
• D) unless they are being altruistic.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products or job orders based on a certain activity base, such as machine hours or labor hours.

Machine-Hours

A unit of measure that represents the operational time of a machine, used in allocating manufacturing overhead based on the time machines are run.

Plantwide Predetermined

A rate, often related to overhead costs, that is set before the accounting period begins and applied uniformly throughout an entire plant or organization.

Machine-Hours

A measure of production output or activity level using the total hours machines are operated.