Deadweight Loss

question 11

Multiple Choice

Deadweight loss:

• A) creates efficiency in markets.
• B) is the difference between the total surplus occurring in a market and the maximum total surplus achievable.
• C) is the loss in producer surplus from a price increase
• D) always occurs in markets.

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Definitions:

Overapplied Overhead

When the allocated manufacturing overhead cost exceeds the actual overhead incurred, resulting in a surplus in the cost coverage.

Activity Cost Pools

Aggregations of all the costs associated with particular activities, used in activity-based costing.

Expected Activity

The anticipated level of operations or output, often used in budgeting and planning.

Predetermined Overhead Rate

A calculated estimate used for allocating overhead costs to products or services, based on an established measure such as labor hours or machine usage, facilitating budgeting and financial planning.