If Real Wage Decreases, the Opportunity Cost of Working in the Home

question 124

Multiple Choice

If real wage decreases, the opportunity cost of working in the home will _____

• A) increase as long as worker productivity decreases.
• B) decrease.
• C) not be affected.
• D) increase as long as worker productivity also rises.
• E) increase only if households want to maintain their standard of living.

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Definitions:

Machine-Hours

A metric indicating the cumulative operational duration of machinery within a specified time frame, often utilized in calculating overhead rates.

Predetermined Overhead Rate

A rate calculated before the period begins by dividing the estimated total overhead costs by an estimated allocation base, used to assign overhead costs to products or job orders.

Manufacturing Cost

The total expense incurred in the process of producing goods, including raw materials, labor, and overhead.

Predetermined Overhead Rate

A rate used to allocate estimated overhead costs to specific products or job orders based on a preselected activity base.