An Equilibrium in Which Scarce Societal Resources Are Allocated to the Production

question 42

Multiple Choice

An equilibrium in which scarce societal resources are allocated to the production of various goods and services up to the point where the cost of the resources equals the benefit society reaps form their use is:

• A) productive efficiency.
• B) allocative efficiency.
• C) true efficiency.
• D) product efficiency.

---

Definitions:

Direct Materials

Direct materials refer to the raw materials that are directly incorporated into a finished product and are integral to its production, easily traceable to the goods being produced.

Raw Materials Purchased

The complete expense of raw materials purchased by a company for production purposes over a given period.

Raw Materials Inventories

Stocks of unprocessed materials that are used in the manufacturing process to produce finished goods.

Controlling

In management, the process of monitoring performance and taking action to ensure desired outcomes.