What is meant by allocative efficiency? How does a perfectly competitive firm achieve allocative efficiency?
What will be an ideal response?
Allocative efficiency refers to a state of the economy in which production reflects consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it. The price of a good represents the marginal benefit consumers receive from consuming the last unit of the good sold. Since perfectly competitive firms produce up to the point where the price of the good equals the marginal cost of the last unit produced, allocative efficiency is achieved.
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The president of the ________ Federal Reserve Bank is always a member of the FOMC
A) Washington, D.C. B) Boston C) New York D) Minneapolis
Refer to the information provided in Figure 19.1 below to answer the question(s) that follow. 
Figure 19.1 Refer to Figure 19.1. The workers? share of the tax burden is
A. $0. B. $2,100. C. $700. D. $1,400.
Policy-oriented economists seek to develop theories to
A. explain how things work, so policies can be formulated. B. describe what happened in a particular time period in history. C. describe current economic events. D. find correlations between events. E. change people’s values and ethics.
The figure above illustrates a rental housing market in which there is a rent ceiling of $400 a month. The rent ceiling is strictly enforced. The number of apartments rented is
A) less than 2 thousand. B) 2 thousand. C) 3 thousand. D) 4 thousand.