Allocative Efficiency Occurs When

question 228

Multiple Choice

Allocative efficiency occurs when

• A) marginal social cost exceeds marginal social benefit.
• B) marginal social benefit exceeds marginal social cost.
• C) marginal social benefit equals marginal social cost.
• D) total social benefit exceeds total social cost.

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Definitions:

Assets And Liabilities

Resources owned and controlled by a business (assets) and obligations to transfer resources to another entity (liabilities).

Current Rate Method

An accounting technique used in currency translation where assets and liabilities are converted at the current exchange rate.

Exchange Rates

The value of one currency for the purpose of conversion to another, indicating how much one currency can be exchanged for another currency.

Functional Currency

The primary currency of the primary economic environment in which the entity operates, usually the local currency or the currency of the primary sales market.