Define the Following Terms and Explain Their Importance to the Study

question 82

Essay

Define the following terms and explain their importance to the study of economics.
a. price elasticity
b. complements
c. substitutes
d. cross elasticity
e. supply elasticity

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Definitions:

Machine-Hours

A measure of production output or activity level using the total hours machines are operated.

Plantwide Predetermined

A uniform overhead rate used across an entire plant or factory, calculated by dividing estimated overhead costs by an estimated allocation base like labor hours or machine hours.

Machine-Hours

An operating measure that quantifies the amount of time production equipment is utilized in the manufacture of goods.

Predetermined Overhead Rate

A rate calculated before a production period based on estimated overhead costs and estimated activity, used to allocate overhead costs to products.