Normative Statements Are Not

question 13

Multiple Choice

Normative statements are not

• A)descriptive.
• B)prescriptive.
• C)claims about how the world should be.
• D)made by economists speaking as policy advisers.

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Definitions:

Machine Hour

A unit of measure representing the operation of a machine for one hour, often used in cost accounting to allocate expenses based on machine use.

Break-even Sales

Break-even sales is the amount of revenue required to cover both fixed and variable costs, resulting in no profit or loss.

Variable Costs

Costs that fluctuate in direct relation to production levels or sales figures.

Fixed Costs

Costs that do not vary with the level of production or sales, remaining constant regardless of business activity.