Organize the Steps an Economist Would Follow in the Model-Building

question 35

Multiple Choice

Organize the steps an economist would follow in the model-building process into their proper order.
 - Use simplifying assumptions 
 - Develop a model
 - Collect data
 - Identify the problem
 - Formulate a conclusion

• A) 1. Develop a model. 2. Collect data. 3. Use simplifying assumptions. 4. Identify the problem. 5. Formulate a conclusion.
• B) 1. Use simplifying assumptions. 2. Collect data. 3. Develop a model. 4. Identify the problem. 5. Formulate a conclusion.
• C) 1. Identify the problem. 2. Develop a model. 3. Use simplifying assumptions. 4. Collect data. 5. Formulate a conclusion.
• D) 1. Formulate a conclusion. 2. Collect data. 3. Identify the problem. 4. Develop a model. 5. Use simplifying assumptions.

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Definitions:

Activity-Based Costing

A costing methodology that assigns expenses to products and services based on the activities that go into producing them.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor, including costs associated with running the factory such as utilities and maintenance.

Overhead Cost

Expenses related to the operation of a business that are not directly tied to a specific product or service, such as utilities and rent.

Activity-Based Costing

A method of costing that identifies the relationship between costs, activities, and products, and through this relationship assigns indirect costs to products less arbitrarily than traditional methods.