When Economists Say an Individual Displays Economizing Behavior, They Simply

question 128

Multiple Choice

When economists say an individual displays economizing behavior, they simply mean that the individual is

• A) making a lot of money.
• B) purchasing only those products that are cheap and of low quality.
• C) learning how to run a business more effectively.
• D) making choices to gain the maximum benefit at the least possible cost.

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, often used in manufacturing to measure efficiency and cost management.

Favorable

A term typically used in budgeting and accounting to describe variances or outcomes that are better than expected or budgeted figures.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead estimated.

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate.