Which of the Following Is an Example of a Diversionary

question 54

Multiple Choice

Which of the following is an example of a diversionary incentive?

• A)The leader of a country starts a war to distract attention from his or her government's struggles.
• B)After a country declares war,public support for the government rises sharply.
• C)The military pushes for more defense funding for troops in the field.
• D)The leader of a country that was unsuccessful in war loses the next election.

Understand the concept of sunk costs and how they influence business decisions.

Calculate a firm’s average total cost given production figures.

Analyze a firm’s decision-making process in relation to average and marginal costs to determine optimal production levels.

Recognize and explain the phenomena of economies of scale and diseconomies of scale.

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Definitions:

Direct Labor-Hours

An alternative term for direct labor-hour, referring to the labor time spent by employees directly on manufacturing a product.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost times the actual quantity of materials used.

Direct Materials Purchases Variance

The difference between the budgeted cost of materials that should have been purchased for the production volume and the actual cost of materials purchased.

Variable Overhead

Costs that fluctuate with production levels, such as utility bills or raw material costs, that are not directly tied to manufacturing.