Which of the Following Statements Is True of Adam Smith's

question 22

Multiple Choice

Which of the following statements is true of Adam Smith's concept of self-interest?

• A)He argued that a person's self-interest was determined by the government.
• B)He assumed that people are motivated by self-interest for economic gain.
• C)He suggested that employees are least productive when motivated by self-interest.
• D)He emphasized that a person's self-interest is not based on his or her individual goals.

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Definitions:

Period Cost

Expenses incurred during a specific time frame that are not directly tied to the production process, such as sales, administration, and marketing expenses.

Direct Materials Inventory

Direct materials inventory refers to raw materials that are directly used in the production of goods. These materials are assets on the balance sheet until they are used in production.

Direct Labor

The labor costs directly tied to the production of goods or services, which can include wages of workers or employees directly involved in manufacturing.

Factory Overhead

The indirect costs associated with manufacturing, including utilities, maintenance, and salaries of non-direct labor employees, that cannot be directly traced to specific products.