Explain what is meant by allocative efficiency
What will be an ideal response?
Allocative efficiency means producing the goods and services that people most want at the lowest possible cost.
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According to the U.S. Secret Service, approximately $2.6 billion of U.S. paper currency in circulation is counterfeit. The U.S. government is continually adding security features to its paper currency to help make counterfeit money easier to detect
If counterfeit currency remained undetected, a vast increase in the supply of counterfeit U.S. currency would A) lower the nominal income of the average U.S. worker. B) decrease aggregate demand in the short run. C) lead to inflation. D) reduce the amount of M1.
Refer to the above figure. An external benefit exists. The amount of that benefit is represented by
A) P4. B) the vertical distance between D1 and D2. C) the distance between G and F. D) P3.
The quantity that a firm will supply in the short run
A. can be read from its average cost curve. B. can be read from its average variable cost curve. C. can be read from the firm’s marginal cost curve above average variable cost. D. is always zero above minimum average variable cost.
The amount of goods and services produced from each unit of labor input is called
a. opportunity cost. b. productivity. c. externality. d. marginal benefit.