Grades Are Low in Your Biology Class,so Your Professor Offers

question 53

Multiple Choice

Grades are low in your biology class,so your professor offers an optional 10-point extra credit assignment.Most of the students turn in the assignment.Which economic principle does this statement BEST represent?

• A) The true cost of something is its opportunity cost.
• B) "How much" is a decision at the margin.
• C) People usually respond to incentives,exploiting opportunities to make themselves better off.
• D) There are gains from trade.

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Definitions:

Net Operating Income

The profit a company makes from its usual business operations, before taxes and interest, calculated by subtracting operating expenses from revenue.

Machine-Hours

A measure of production time used in cost accounting that quantifies the hours a machine is operated.

Variable Overhead

Variable overhead refers to costs that fluctuate with production levels, such as utilities or materials used in production that can vary with output.

Efficiency Variance

The difference between the actual costs incurred and the standard costs for the actual level of production activity, indicating efficiency in resource usage.