Explain What Herding and Leverage Are and How They Can

question 109

Essay

Explain what herding and leverage are and how they can lead to a bubble.Also explain why leverage can cause the bursting of a bubble to be worse than it otherwise would be.

Analyze the impact of production and sales volume on net operating income.

Understand the role of fixed and variable costs in costing methods.

Calculate the value of ending inventory under both absorption and variable costing.

Understand the concept of contribution margin.

---

Definitions:

Goods and Services

The tangible products and intangible activities that satisfy human wants or needs and are available for purchase.

Efficiently

Achieving a goal or desired outcome with the minimum waste of time, effort, or resource, often associated with optimal productivity.

Marginal Rate

A measure of the change in one variable compared to a unit change in another variable.

Sailboats

Wind-powered boats used for recreation, sport, or transportation, showcasing a blend of traditional and modern navigational technology.