As Production Becomes More Automated,direct Labor May Be Viewed More

question 129

True/False

As production becomes more automated,direct labor may be viewed more as a conversion cost than as a prime cost.

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Definitions:

Income Effect

The change in an individual's or economy's income and how that change affects the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a change in relative prices, holding the consumer's overall utility constant.

Income Effect

The Income Effect describes how changes in an individual's income affect their purchasing capacity and thus their demand for goods and services.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite to normal goods.