Allocative Efficiency Occurs in Markets When

question 97

Multiple Choice

Allocative efficiency occurs in markets when

• A)goods are produced using the least amount of society's scarce resources
• B)goods are produced at the lowest possible average total cost
• C)goods are produced at the lowest possible marginal cost
• D)the value to society of the last unit produced equals its marginal cost
• E)the value to society of the last unit produced is greater than its marginal cost

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Definitions:

Standard Costs

Predetermined costs to manufacture a single unit or a number of units of a product during a specific period under expected or normal conditions.

Materials Quantity Variances

The difference between the actual quantity of materials used in production and the expected quantity, measured in cost.

World Class Company

A business that achieves high standards in its operations, services, and products, often excelling in areas like customer satisfaction, innovation, and efficiency, and recognized globally for its excellence.

Standard Cost Accounting System

A cost accounting system that assigns preset costs to products or services, used for budgeting and controlling expenses.