If the Marginal Social Benefit of Pizza Exceeds the Marginal

question 249

True/False

If the marginal social benefit of pizza exceeds the marginal social cost of pizza, the economy is producing the efficient quantity of pizza.

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Definitions:

Indirect Materials

Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.

Variable Cost

is a cost that varies with the level of output or activity, such as raw materials or piece-rate labor.

Spending Variance

The difference between the budgeted amount of expense or revenue and the actual amount spent or received.

Activity Variance

The difference between planned activity costs and actual activity costs in managerial accounting, used for budget control and performance evaluation.