When the Efficient Quantity of Output Is Produced

question 334

Multiple Choice

When the efficient quantity of output is produced

• A) the marginal social benefit of the last unit produced is equal to the marginal social cost of the last unit produced.
• B) the sum of consumer surplus and producer surplus is maximized.
• C) resources are used in the activities in which they are most highly valued.
• D) All of the above answers are correct.

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Definitions:

Board Feet

A unit of measure for lumber, representing a volume of 144 cubic inches, equivalent to a board that is one foot long, one foot wide, and one inch thick.

Quantity Variance

The difference between the actual quantity of materials or labor used in a process and the expected amount, which affects overall production costs.

Direct Materials

Raw materials that are directly traceable to the production of a specific good or service and are a significant portion of the production cost.

Standard Quantity

The expected amount of materials or inputs required to produce a unit of product under normal operating conditions.