The Ratio of the Price of the Good on the Horizontal

question 77

Multiple Choice

The ratio of the price of the good on the horizontal axis divided by the price of the good on the vertical axis multiplied by -1

• A)is the slope of the demand curve
• B)measures the price elasticity of demand for a particular good
• C)defines real income for the consumer
• D)is the slope of the budget line
• E)is the slope of the indifference curve

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Definitions:

Overhead Absorption Rate

Budgeted overhead divided by budgeted volume. Also called overhead application rate.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process.

Standard Volume

The amount of volume the plant would have generated if each unit of product manufactured used precisely the standard unit of volume allowed.

Budgeted Volume

The amount of production expected to occur during the year, usually stated in terms of a common input measure such as direct labor hours. Budgeted volume can be estimated as expected volume for next year or normal volume over the long run.