If the Only Information We Had About Goldie Were That

question 19

Multiple Choice

if the only information we had about Goldie were that she chooses the bundle (6, 6) when prices are (6, 7) and she chooses the bundle (10, 0) when prices are (2, 5) , then we could conclude that

• A)Goldie violates WARP.
• B)the bundle (6, 6)is revealed preferred to (10, 0)but there is no evidence that she violates WARP.
• C)neither bundle is revealed preferred to the other.
• D)the bundle (10, 0)is revealed preferred to (6, 6)and she violates WARP.
• E)the bundle (10, 0)is revealed preferred to (6, 6)but there is no evidence that she violates WARP.

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Definitions:

Traditional Costing

An accounting method that assigns all manufacturing overhead costs to products based on a predetermined overhead rate, regardless of the activities that generated the costs.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities they require.

Direct Labor-Hours

The total amount of time spent by workers directly involved in the manufacturing activities.

Activity-Based Costing

A method in accounting that assigns costs to products and services based on the resources they consume.