Both Microeconomic and Macroeconomic Theories

question 63

Multiple Choice

Both microeconomic and macroeconomic theories:

• A)clearly state the public policies that should be undertaken to avoid or solve a particular problem under consideration.
• B)deal with the aggregate.
• C)deal with what ought to be as opposed to what is.
• D)are forms of positive economics.
• E)deal with individual entities in an economy.

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Definitions:

Actual Total Variable Overhead Cost

The amount incurred in variable overhead expenses for actual production activities.

Standard Variable Overhead Rate

A predetermined rate used to allocate variable overhead costs to units of production, based on expected activity levels.

Practical Standards

Standards that allow for normal machine downtime and other work interruptions and that can be attained through reasonable, though highly efficient, efforts by the average worker.

Standard Quantity

This term refers to the amount of input (materials, labor, etc.) that should be used in the production of a unit of goods under normal conditions.