If the Demand for a Consumer Good Increases, the Demand

question 144

Multiple Choice

If the demand for a consumer good increases, the demand for resources required to make the good will

• A) remain the same, but the quantity demanded will increase.
• B) decrease if the demand for the consumer good is inelastic, otherwise the demand will increase.
• C) stay the same, but the quantity demanded will decrease.
• D) increase.

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Definitions:

Estimated Overhead

Projected costs of indirect materials, labor, and other expenses that are necessary for production but are not directly traceable to specific products.

Allocation Factor

A criterion or formula used to distribute costs or revenues among various departments, products, or projects based on relevant measures such as time, usage, or volume.

Direct Labor Hours

The total hours worked by employees directly involved in the production process, used as a measure for allocating labor costs to products or services.

Factory Overhead

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