The Cross Price Elasticity of Demand Between Two Goods Will

question 98

Multiple Choice

The cross price elasticity of demand between two goods will be positive if

• A) the two goods are complements.
• B) the two goods are substitutes.
• C) the two goods are luxuries.
• D) one of the goods is a luxury and the other is a necessity.

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Definitions:

Direct Labor-Hours

A measure of the total hours worked by employees who are directly involved in the manufacturing process or production of goods.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated before the period begins by dividing estimated overhead costs by an estimated allocation base.

Machine-Hours

A measurement of the amount of time machines are operated in the production process, used as an allocation base for applying manufacturing overhead.

Direct Labor-Hours

A measure of the total hours worked directly on a specific product or service by employees.