The Study of Microeconomics and Macroeconomics Differs in That

question 27

Multiple Choice

The study of microeconomics and macroeconomics differs in that:

• A)microeconomics is concerned with the domestic economy and macroeconomics is concerned only with the international economy.
• B)microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy.
• C)microeconomics studies the actions of households and macroeconomics studies the actions of business firms.
• D)microeconomics studies the economy in terms of private individuals and firms while macroeconomics includes the effect of government.
• E)microeconomics examines the whole economy while macroeconomics studies the individual units of the economy.

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Definitions:

Processing Activity

Activities involved in transforming inputs into finished goods through operations such as assembling, cooking, or chemical processing.

Activity-Based Costing

An accounting method that identifies the activities a firm performs and then assigns indirect costs to products. It improves accuracy of product costing by linking cost more directly to the activities that drive those costs.

Overhead Cost

Indirect expenses related to the general operation of a business, not directly tied to a specific product or service.

First Stage Allocations

The initial process of distributing overhead costs to various cost centers or departments in a company.