With allocative efficiency:
a. There is production of that particular mix of goods and services most wanted by society
b. There is production of any particular mix of goods and services in the least costly way
c. The available supplies of factors of production are fixed in both quantity and quality
d. The state of technology, or methods used to produce output, do not change
a. There is production of that particular mix of goods and services most wanted by society
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Starting from long-run equilibrium, the long-run impact(s) of a sharp drop in oil prices, compared to the original equilibrium, is(are):
A. the same inflation and the same output. B. lower inflation and lower output. C. higher inflation and the same output. D. higher inflation and lower output.
Refer to Scenario 2. Diminishing marginal returns starts to occur between units:
A) 2 and 3. B) 3 and 4. C) 4 and 5. D) 5 and 6.
If unplanned investment is positive, firms will ________ production and output will ________
A) cut; rise B) cut; fall C) increase; rise D) increase; fall
Government intervention
a. can provide incentives to conduct business in an illegal black market b. plays no role in generating wealth c. is the best way to eliminate poverty d. does not enforce property rights