What Is the Basic Idea Behind the Economic System Supported

question 36

Multiple Choice

What is the basic idea behind the economic system supported by the philosopher Adam Smith that we now refer to as laissez-faire?

• A) Allowing private individuals to pursue wealth creates economic disaster.
• B) Privately owned corporations and private individuals should control most economic activity.
• C) Religious and secular authorities would be the most efficient in setting prices and profits.
• D) Countries should put an end to divisions of labor and the specialization of workers.
• E) The government and public corporations should be the primary regulators of the economy.

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Definitions:

Underapplied Overhead

A situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Direct Materials

Basic substances directly linked to the creation of a particular product.

Job No. 100

This is generally a specific reference to a unique job or project number within a job-order costing system, and not a widely known key term.