If an Economy Is Operating Inefficiently, Then

question 191

Multiple Choice

If an economy is operating inefficiently, then

• A)the economy can increase production of consumption goods without reducing capital goods.
• B)there is always a positive opportunity cost to increasing output.
• C)output can only be increased through capital investment.
• D)output cannot be increased.

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Definitions:

Direct Labor-Hours

A measure of the amount of time workers spend directly manufacturing a product or performing a service.

Materials Quantity Variance

The variance arising from the actual amount of materials utilized in manufacturing compared to the anticipated standard quantity, times the standard expense for each unit.

Labor Efficiency Variance

The variance between the number of hours actually worked and the anticipated standard hours, times the normal rate per hour.

Labor Rate Variance

A metric used to measure the difference between the actual rate paid to workers and the expected (or standard) rate.