If Leisure Is a Normal Good, Then a Decrease in Income

question 139

Multiple Choice

If leisure is a normal good, then a decrease in income __________ the time allocated to __________.

• A)decreases; market work
• B)decreases; leisure
• C)decreases; nonmarket work
• D)increases; leisure
• E)increases; market work, nonmarket work, and leisure time

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Definitions:

Predetermined Overhead Rate

A rate calculated before a production period based on estimated overhead costs and activity levels, used to allocate overhead costs to products.

Capacity

The highest amount of production a business can maintain over a specific time frame under standard conditions.

Machine-Hours

A measure of production volume or activity based on the number of hours that machines are operated.

Unused Capacity

The available production or service facility that is not currently being used to its full potential.