An Economy Is Efficient When

question 32

Multiple Choice

An economy is efficient when:

• A)the problem of scarcity is eliminated.
• B)output is distributed equitably.
• C)all opportunities to make some people better off without making other people worse off have been taken.
• D)all opportunities to make some people worse off without making other people better off have been taken.

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Definitions:

Inventory Increase

An rise in the quantity or value of goods held by a company for the purpose of sale in the normal course of business.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly involved in creating the good.

Accounts Payable Decrease

A reduction in the amount a company owes to its suppliers or vendors, indicating payments have been made.

Direct Method

A approach to cash flow statement preparation where actual cash receipts and payments are reported, instead of adjusting net income.