In the Absence of Externalities,what Can Be Said About the Invisible

question 72

Multiple Choice

In the absence of externalities,what can be said about the invisible hand of the marketplace

• A)It leads to a market outcome that maximizes total benefit to society.
• B)It is unable to resolve inherent disagreements between parties in the market system.
• C)It induces people to act in a manner inconsistent with self-interest.
• D)It increases the transaction costs so reaching an efficient outcome is especially difficult.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to individual units of production, based on a chosen activity base.

Direct Labor-Hours

A measure of the work input in terms of hours that can be directly attributed to the production process.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a selected activity base, like direct labor hours or machine hours.

Machine-Hours

A measure of the total time machines are operated within a production process, often used for allocating costs based on machine usage.