If the Marginal Cost of Treating an Illness Is Zero,the

question 45

Multiple Choice

If the marginal cost of treating an illness is zero,the optimal amount of treatment to receive is the amount

• A)for which the marginal benefit is zero.
• B)that cures the illness.
• C)for which average benefit is zero.
• D)for which the total benefit is zero.

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Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of materials, labor, and overhead a company has applied to produce partially completed goods in terms of fully completed units.

Work In Process

Inventory that includes materials that have been partially processed but are not yet completed products.

Conversion Costs

The costs necessary to convert raw materials into finished products, usually consisting of labor and overhead expenses.

Unit Materials Cost

The cost assigned to individual units that includes the direct materials expense required to produce each unit, integral for calculating the total production cost.