In a Market-Directed Economy

question 296

Multiple Choice

In a market-directed economy:

• A) profit, survival, and growth are all guaranteed for producers.
• B) consumers have little freedom of choice.
• C) consumers decide what is to be produced and by whom through their dollar votes.
• D) prices usually do not change according to supply and demand.
• E) only the needs of the majority are served.

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Definitions:

Standard Labor-Hours

The predetermined amount of time expected to be spent on a specific task or production process, used for planning and efficiency analysis.

Actual Output

The real quantity of goods or services produced within a specified period.

Variable Overhead Rate

A rate used to assign variable overhead costs to units of production, based on an activity driver such as labor hours or machine hours, fluctuating with changes in production activity.

Overhead Efficiency

The effectiveness with which a business uses its overhead expenses to produce goods or services.