The Rational-Ignorance Effect Is a Result of

question 25

Multiple Choice

The rational-ignorance effect is a result of

• A) externalities that lead to an excess supply of information.
• B) the limited incentive of the news media to cover political campaigns.
• C) the expectation of individual voters that their vote will not be decisive.
• D) the lack of a college education on the part of most voters in the United States.

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Definitions:

Fixed Overhead

Refers to the total of all indirect costs that remain constant regardless of the level of production or business activity.

Absorption Costing

Absorption Costing is an accounting method that includes all of the manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Variable Overhead

Costs that fluctuate with production volume, such as utilities or materials used in production.

Variable Costing

A costing method that includes variable manufacturing costs—direct materials, labor, and variable overhead—in the cost of production.