Efficiency Is an Important Goal Because When Markets Are Efficient

question 53

Multiple Choice

Efficiency is an important goal because when markets are efficient:

• A)there is less income inequality.
• B)the poor benefit more than the wealthy.
• C)there are more resources available to achieve other goals.
• D)there is no need for government intervention in the economy.

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Definitions:

Variable Costing

A system in accounting that considers solely the changing costs associated with production (direct materials, direct labor, and variable manufacturing overhead) in the calculation of product prices.

Net Operating Income

Net Operating Income, often abbreviated as NOI, is a financial metric that calculates a company’s profit after subtracting operating expenses excluding taxes and interest.

Absorption Costing

Absorption costing is an accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Absorption Costing

An accounting method that includes all manufacturing costs (both variable and fixed) in the cost of a product.