The Economic Concept of Scarcity Refers to the Fact That

question 135

Multiple Choice

The economic concept of scarcity refers to the fact that:

• A) the United States will always have a battle to fight hunger.
• B) resources are often wasted and shortages are often the result.
• C) income must be redistributed through taxation in order to address income disparity.
• D) limited resources require economies to make choices among production alternatives.

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Definitions:

Fixed Component

The portion of a cost that remains constant regardless of the level of activity or output.

Overhead Efficiency

A measure of how effectively a business uses its overhead costs in the production process, often improving profit margins when increased.

Overapplied

In cost accounting, it refers to a situation where the allocated overhead for a period is more than the actual overhead incurred.

Underapplied

A situation where the assigned manufacturing overhead expenses fall short of the real overhead costs that have been spent.