The Price Used to Record Exchanges of Goods and Services

question 21

Multiple Choice

The price used to record exchanges of goods and services inside an organization is called a:

• A) Transfer price
• B) Exchange price
• C) Full price
• D) Suboptimal price

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Definitions:

Efficiency

The extent to which resources are used optimally to achieve a specific outcome with minimal waste.

Incentives

Factors, usually financial or material rewards, that motivate individuals or firms to act in a certain way.

OPEC

The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization of oil-producing countries that coordinates and unifies the petroleum policies of its member states.

Efficient Allocation

The distribution of resources in a way that maximizes the net benefit to society or achieves a desired outcome effectively.