Resource Use Is Allocative Efficient

question 81

Multiple Choice

Resource use is allocative efficient

• A) when it is not possible to produce more of one good.
• B) when we produce goods and services that we value most highly.
• C) when most resources are fully employed.
• D) at any point on the PPF.
• E) at all points either on or within the PPF because all these production points are attainable.

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Definitions:

Period Cost

Costs that are expensed in the period in which they are incurred, typically related to selling, general, and administrative activities rather than production.

Selling and Administrative Expense

The combined total of all expenses directly related to the selling of products and the administration of a business.

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are an integral part of the finished product.

Transportation Out

Transportation out refers to the costs associated with delivering goods from a seller to a buyer, often recognized as a selling expense.