Resources Are Allocated Efficiently When

question 120

Multiple Choice

Resources are allocated efficiently when

• A) everyone can afford what they want.
• B) production occurs at least cost.
• C) output is fairly distributed.
• D) profits are maximized.

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Definitions:

Variable Cost

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production supplies.

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Contribution Margin Ratio

The proportion of sales revenue that remains after variable production costs are deducted, indicating the profitability of specific products.

Monthly Sales

represent the total revenue or units sold within a month.