Define productive efficiency. Does productive efficiency imply allocative efficiency? Explain
What will be an ideal response?
Productive efficiency is an efficiency criterion that describes a situation in which goods and services are produced at the lowest possible cost. It does not imply allocative efficiency which is a criterion associated with producing goods and services that consumers value most. For example, a manufacturer may be able to produce typewriters at the lowest possible cost of $200, but this does not necessarily mean that consumers are willing to pay $200 for a typewriter.
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Elite Astin-Martin Cars offers its customers a fancy showroom and a knowledgeable sales force. If Astin-Martins Are Us opens an outlet nearby, offering cut rate prices and little service, then Elite Astin-Martin Cars will likely find
a. more customers attracted to buying Astin-Martins and its sales will increase. b. more customers visiting its showroom, but lower sales. c. fewer customers visiting its showroom and lower sales. d. fewer customers visiting its showroom but more of them making a purchase.
Entities that buy up patents then try to extract large payments from companies that use similar technologies are known as ________
A) Solow pirates B) tertiary leeches C) Great Googly Mooglies D) patent trolls
Given the information in Figure 18.1, the competitive output in the corbomite industry is:
A) Q0. B) Q1. C) Q2. D) any level as long as price is P0.
To answer the next question use the information in the table below which illustrates the multiplier process resulting from an autonomous increase in investment by $5. Change in IncomeChange in ConsumptionChange in SavingsAssumed increase in investment$5.00 $1.25Second round $2.81 All other rounds 8.44 Totals 5.00The multiplier in this economy is
A. 2. B. 3. C. 4. D. 5.