The "Equal Bang for the Buck" Idea Means That the Consumer

question 13

Multiple Choice

The "equal bang for the buck" idea means that the consumer is equating:

• A)the marginal utilities of all of the goods purchased.
• B)the prices of all the goods purchased.
• C)the marginal utilities of the last dollar spent on each good purchased.
• D)the ratios of the last dollar spent on each good purchased.

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked to produce goods and the standard hours expected, multiplied by the standard labor rate, indicating efficiency in labor use.

Material Price Variance

The variance between the real price paid for materials and their anticipated (standard) price.

Material Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted or standard cost, attributable to paying a higher or lower wage rate than anticipated.