If an Economy Is Being "Allocatively Efficient," Then That Means

question 83

Multiple Choice

If an economy is being "allocatively efficient," then that means the economy is:

• A) using the least costly production techniques.
• B) producing the goods and services most wanted by society.
• C) fully employing all economic resources.
• D) maximizing the returns to factors of production.

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Definitions:

Sequential Method

An approach to cost allocation in which support department costs are allocated to other support and operating departments sequentially, one after another, based on a predetermined order.

Reciprocal Services

Services exchanged between departments within an organization, used in cost accounting to allocate service department costs to producing departments.

Reciprocal Services

Services exchanged between departments within an organization or between companies without direct monetary payment, often valued and accounted for through internal mechanisms.

ABC

An abbreviation for Activity-Based Costing, a method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.