When Resource Markets Are Free to Adjust, Temporary Differentials Will

question 115

Multiple Choice

When resource markets are free to adjust, temporary differentials will cause

• A)b, c, and e to occur
• B)the allocation of fewer resources to lower-paid uses
• C)the equalization of payments for the same resource in different uses
• D)no change in the allocation of resources
• E)the allocation of more resources to higher-paid uses

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for a more accurate comparison of actual vs. budgeted performance.

Predicted Amount

An estimated figure or value expected to be achieved in the future based on current data and trends.

Sales

The activities involved in selling products or services, ultimately resulting in revenue for the business.

Ideal Standards

Benchmarks for costs and efficiency that represent optimal levels of performance under perfect operating conditions.