In a Competitive Market,an Efficient Allocation of Resources Is Characterized

question 11

Multiple Choice

In a competitive market,an efficient allocation of resources is characterized by

• A)a price greater than the marginal cost of production.
• B)the possibility of further mutually beneficial transactions.
• C)the largest possible sum of consumer and producer surplus.
• D)a value of consumer surplus equal to that of producer surplus.

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Definitions:

Actual Total Labour Cost

The real amount spent on wages and benefits for employees involved in the production process during a specific period.

Standard Labour Rate

The pre-established rate per hour that a company expects to pay for direct labor.

Actual Units

The real quantity of items produced, sold, or consumed, as opposed to planned or theoretical quantities.

Variable Overhead Spending Variance

This is the difference between the actual variable overheads incurred and what was expected or budgeted, based on the actual level of production activity.