Better Short-Run Use of Current Capacity

question 105

Multiple Choice

Better short-run use of current capacity

• A)Moves the economy closer to the production possibilities curve,while long-run growth shifts that curve outward.
• B)Increases capacity,while long-run economic growth increases capacity utilization.
• C)Shifts the aggregate supply curve outward,while long-run economic growth moves the economy up the aggregate supply curve.
• D)And long-run growth both shift the aggregate supply curve outwarD.In the short run,the production possibilities curve is fixed,but in the long run,it can shift outward with economic growth.

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Definitions:

Product-Level Costs

Expenses directly tied to specific products, including costs for materials and labor required to produce these products, as well as costs associated with specific product designs or customized orders.

Traditional Costing System

An accounting method that allocates overhead costs to products based on a predetermined overhead rate.

Activity-Based Costing System

A costing methodology that assigns manufacturing overhead costs to products based on the activities and resources that go into producing them.

Unit Product Costs

The cost assigned to each unit of product, which includes direct materials, direct labor, and allocated manufacturing overhead.