Which of the Following Is NOT an Example of Efficient

question 29

Multiple Choice

Which of the following is NOT an example of efficient performance?

• A) Direct labor hours used per unit were less than expected.
• B) Direct material used per unit was less than expected.
• C) More outputs were achieved with less inputs than predicted.
• D) More outputs were produced than expected.

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Definitions:

Positive Externalities

Benefits that are enjoyed by third-parties as a result of an economic transaction or activity, without them directly participating in the transaction.

Pigouvian Tax

A tax imposed on activities that generate negative externalities, aimed at correcting an inefficient market outcome.

Marginal Social Benefits

The incremental benefit the public receives from consuming an additional unit of a good or service.

Marginal Private Benefits

The additional benefits received by an individual or firm from consuming or producing one extra unit of a good, not considering external effects.