In a Market System, Which Component Conveys Information About What

question 102

Multiple Choice

In a market system, which component conveys information about what is relatively scarce and what is relatively abundant?

• A) The number of producers
• B) The number of consumers
• C) Prices
• D) The amount of government regulation

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and management salaries, not directly tied to direct materials or direct labor.

Predetermined Overhead Rate

A rate used in cost accounting to allocate overhead costs based on an estimated activity level.

Direct Labor-hours

The hours that workers contribute directly towards the manufacture of goods over a specified period.

Fixed Manufacturing Overhead

Costs associated with production that do not vary with the level of output, such as depreciation of machinery and the salary of the factory manager.