In Assessing the Efficiency of Government Policy, Economic Analysis Would

question 117

Multiple Choice

In assessing the efficiency of government policy, economic analysis would focus on

• A) the size of government: big versus small.
• B) marginal benefits versus costs of government policy and action.
• C) presence or absence of the invisible hand.
• D) revenues and profitability of the government agencies.

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Definitions:

Operating Income

The profit realized from a business's core operations after deducting operating expenses such as wages and cost of goods sold, but before taxes and interest.

Direct Labor

The cost of wages for those workers directly involved in the production of goods or services, not including support staff.

Overhead

General business expenses that are not directly attributable to a specific business activity, product, or service but are necessary for the business to operate.

Variable Manufacturing Costs

Costs that vary in direct proportion to changes in production volume, including costs such as raw materials and direct labor.