Suppose the Government Would Like to Reduce Smoking Rates Among

question 48

Multiple Choice

Suppose the government would like to reduce smoking rates among teenagers. Which of the following policies is designed to achieve this goal by changing incentives?

• A) The government requires all high school students to take a health class, and the harmful effects of cigarette smoke will be a required component of the curriculum.
• B) The government asks all high schools to post "Thank you for not smoking" signs around the school grounds.
• C) The government raises the legal age for purchasing cigarettes to 20.
• D) The government raises the tax on cigarettes.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the standard (or expected) cost, indicating how much more or less was spent on materials than was planned.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost of labor at the standard rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost accounting.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on the predetermined rate.