The Scientific Method and the Tools of Economics Are Useful

question 16

Multiple Choice

The scientific method and the tools of economics are useful in examining:

• A) only how individuals make decisions.
• B) only how business firms make decisions.
• C) only how government policies affect macroeconomic outcomes.
• D) only the trade-offs evident in production possibilities frontier (PPF).
• E) anything; economists will use their tools to study anything in the world around them.

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Definitions:

Standard Cost System

A method of cost accounting that uses cost estimates to predict the cost of producing a product under normal conditions, serving as a benchmark for evaluating performance.

Work in Process

Refers to the goods that are in the stages of production but are not yet complete.

Fixed Manufacturing Overhead

Expenses related to production that do not change with the level of output, such as rent, salaries of permanent staff, and depreciation of factory equipment.

Work in Process

Inventory items that are in the manufacturing process but have not yet completed production.