The Value of a Slice of Pizza to a Consumer

question 329

Multiple Choice

The value of a slice of pizza to a consumer is equal to

• A) its marginal benefit.
• B) the maximum price the consumer is willing to pay.
• C) the consumer surplus.
• D) Both answers A and B are correct.
• E) Both answers B and C are correct.

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead, against which actual costs are compared.

Cost of Goods Sold

Expenses directly associated with producing goods a company sells, entailing labor and material costs.

Standard Cost Variances

The differences between actual costs and standard costs in manufacturing, divided into categories such as materials, labor, and overhead.

Administrative Expenses

Overhead or general expenses related to the day-to-day operations of a business that are not directly tied to a specific project.