-Identify the 3 Curves in the Above Figure

question 361

Multiple Choice

-Identify the 3 curves in the above figure.

• A) (1) is long-run aggregate supply, (2) is short-run aggregate supply, (3) is aggregate demand.
• B) (1) is aggregate demand, (2) is short-run aggregate supply, (3) is long-run aggregate supply.
• C) (1) is short-run aggregate supply, (2) is long-run aggregate supply, (3) is aggregate demand.
• D) (1) is long-run aggregate supply, (2) is aggregate demand, (3) is short-run aggregate supply.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead cost incurred and the expected (standard) cost, based on the actual level of activity.

Direct Labor Standards

The expected labor time and cost that should be incurred under normal conditions to produce a unit of output.

Labor Rate Variance

The difference between the actual cost of direct labor and the estimated cost of direct labor at standard rates for the production achieved.

Labor Efficiency Variance

The difference between the actual hours worked to produce goods and the standard hours expected, multiplied by the standard labor rate, indicating efficiency in labor use.