The Marginal Rate of Transformation Where Goods X and Y

question 50

Multiple Choice

The marginal rate of transformation where goods X and Y are produced by an economy using capital and labor as inputs equals

• A) X/Y.
• B) w/r, where w is the wage and r is the rental rate of capital.
• C) MP_L/MP_K, where L stands for labor and K stands for capital.
• D) MC_X/MC_Y

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Definitions:

Activity-Based Costing

A method of allocating overhead and indirect costs to specific products or projects based on their use of resources.

Activity Rate

The cost driver rate that is used to assign activity costs to products or services based on their consumption of the activity.

Cost Pools

Groups of individual costs combined to allocate costs more efficiently.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities they require, aiming for more accurate product costing.