For a Market to Work Efficiently

question 25

Multiple Choice

For a market to work efficiently

• A) the external costs must be paid.
• B) all external costs must be eliminated.
• C) all internal costs must be eliminated.
• D) the social costs must be equal to the internal costs.
• E) all pollution must be eliminated.

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Definitions:

Standard Costing System

A cost accounting method that assigns expected costs to products, services, or cost units, used for budgeting and performance evaluation.

Direct Labour Hours

The total hours worked by employees who are directly involved in the production process, often used as a basis for allocating labor costs to products.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities they require, for more accurate product costing.

Activity Costs

Expenses associated with specific activities within a manufacturing or service delivery process, including labor, materials, and overhead.