If the Price of Pizzas Has Risen from $4 to $5

question 72

Multiple Choice

If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of aerobics class has risen from $20 to $30, then

• A) pizzas have become relatively more expensive.
• B) aerobics classes have become relatively more expensive.
• C) the relative prices of pizzas and aerobics classes have remained constant.
• D) workers' real income must have decreased.

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Definitions:

Quantity Standard

The expected or budgeted quantity regarding inputs or outputs, used as a performance measure or pricing basis.

Price Standard

A predetermined cost that represents what should be paid for a unit of input, such as materials or labor.

Materials Price Variance

Materials price variance is the difference between the actual cost of materials used in production and the standard cost expected, it can indicate changes in market prices or purchasing efficiency.

Quantity Standard

A specific measure established to gauge the expected or optimal quantity of input required to produce a unit of output.