Resource Use Is Allocatively Efficient

question 99

Multiple Choice

Resource use is allocatively efficient

• A) when marginal benefit equals marginal cost.
• B) whenever marginal benefit exceeds marginal cost.
• C) whenever marginal cost exceeds marginal benefit.
• D) when the maximum possible quantity is being produced.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, divided by revenue, expressed as a percentage, indicating the financial health and profitability of a company's core activities.

Net Operating Income

The profit realized from a business's operations after subtracting all operation-related expenses from gross income.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue is contributing to the fixed costs and net profit after covering the variable costs.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage, indicating the percentage of sales revenue that turns into profit.