The Invisible Hand Property 2 Maintains That

question 25

Multiple Choice

The Invisible Hand Property 2 maintains that:

• A) the right mix of resources will be found in each industry, maximizing the total value of production.
• B) entry barriers prevent profit signals from working in competitive markets.
• C) resources are allocated by greatest need for the greatest number.
• D) production costs are minimized.

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Definitions:

Service Department Costs

Costs associated with the departments that do not directly produce goods but provide essential support services to production departments.

First-In, First-Out Method

An accounting method for valuing inventory where the oldest items are sold or used first.

Equivalent Units

A concept in process costing that converts partially completed units into a number of equivalent full units for the purpose of cost assignment.

Weighted-Average Method

An inventory valuation technique that calculates the cost of inventory by taking the average cost of all similar items present in the inventory.