The "Invisible Hands" Ability to Coordinate the Decisions of the Firms

question 91

Multiple Choice

The "invisible hands" ability to coordinate the decisions of the firms and households in the economy can be hindered by

• A)government actions that distort prices.
• B)increased competition in markets.
• C)enforcement of property rights.
• D)too much attention paid to efficiency.

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Definitions:

Period Cost

Costs incurred that do not directly relate to the production of goods, such as sales and administrative expenses.

Salespersons' Commissions

This refers to the payment made to sales staff based on a percentage of the sales they generate, as a form of incentive and reward.

Product Cost

The total expenditure incurred to produce, acquire, and sell products, including direct materials, direct labor, and overhead.

Period Cost

Overheads not directly linked to production, charged as expenses in the timeframe they happen.