An Activity Variance Is Due to the Difference Between the Level

question 153

True/False

An activity variance is due to the difference between the level of activity used in the flexible budget and the actual level of activity.

---

Definitions:

Marginal Private Benefit

The additional benefit received by the consumer or producer from consuming or producing one more unit of a good or service.

Marginal Social Cost

The additional cost imposed on society as a whole from producing one more unit of a good or service.

Socially Optimal

is a condition or outcome in which the allocation of resources maximizes the overall benefit to society.

Nonexcludable

A characteristic of a good whereby it is difficult or impossible to prevent people who have not paid for it from consuming or using it.