Louisa Is a Gifted Baker

question 68

Multiple Choice

Louisa is a gifted baker. She plans to open a small café in which she will be the head pastry chef. Louisa is willing to work the long hours because she believes that hard work will allow her business to succeed and earn her sizeable profits. Louisa's efforts are most consistent with the economic theory developed by

• A) Thomas Malthus.
• B) Karl Marx.
• C) Adam Smith.
• D) Thomas Piketty.

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Definitions:

Manufacturing Overhead

All the manufacturing costs except raw material and direct labor.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, depreciation, and salaries for production supervisors.

Direct Labor

The wages of those persons whose efforts directly affect the quality or other characteristics of the products manufactured.

Raw Materials

Basic materials used in the manufacturing process to produce finished goods, not yet processed or used in production.