We Can Say That the Allocation of Resources Is Efficient

question 27

Multiple Choice

We can say that the allocation of resources is efficient if

• A)producer surplus is maximized.
• B)consumer surplus is maximized.
• C)total surplus is maximized.
• D)sellers' costs are minimized.

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Definitions:

Accounts Receivable

The amount customers have yet to pay a company for products or services that have already been provided or utilized.

Notes Receivable

A customer’s written promise to pay an amount and possibly interest at an agreed-upon rate; amounts that customers owe for which a formal, written instrument of credit has been issued.

Direct Write-Off Method

A method of accounting for bad debts that involves charging unpaid accounts directly to the expense account when they are determined to be uncollectible.

Bad Debt Expense

The operating expense incurred because of the failure to collect receivables.