Which of the Following Is True in a Market Economy

question 16

Multiple Choice

Which of the following is true in a market economy?

• A) Central planners determine answers to the basic economic questions.
• B) Resources are used efficiently.
• C) The distribution of wealth is equal.
• D) Information for production and distribution decisions pass directly to buyers from the government.

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Definitions:

Standard Cost Performance Report

A financial analysis tool that compares actual costs incurred to standard costs, identifying variances for managing performance.

Variance Analysis

The process of investigating the difference between planned and actual numbers to understand deviations in financial performance.

Direct Materials Price Variance

The difference between the actual cost and the standard cost of materials used in production, indicating how effectively a company manages its material costs.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels of the organization.