Which of the Following Is an Example of Changes Along

question 15

Multiple Choice

Which of the following is an example of changes along the intensive margin?

• A) A firm hires more workers because demand for the good has increased.
• B) A new firm closes because a recession causes sales to drop too low.
• C) A worker leaves her job to stay at home with her children.
• D) After the iPhone was developed,several competitors entered to earn a profit.
• E) Consumers demand more high-definition TVs,so the price of other types of
• TVs decreases.

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Definitions:

Absorption Costing

Absorption costing is a method of inventory costing in which all variable and fixed manufacturing costs are included in the cost of a unit of product, distinguishing it from variable costing.

Net Operating Income

The total profit of a business after all operating expenses are deducted from gross revenue, excluding taxes and interest payments.

Corporation

is a legal entity recognized by law as a separate entity from its owners, with its own rights and obligations.

Variable Costing

A costing method that includes only variable manufacturing costs in product costs and treats fixed manufacturing overhead as a period expense.