What is productive efficiency? Does it guarantee that markets are operating efficiently?
Productive efficiency requires that firms in an industry produce goods and services in the least costly way. Productive efficiency alone does not guarantee that markets are operating efficiently. Society must also produce the goods and services that society wants most. This requires that a competitive market achieves allocative efficiency.
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
Refer to Figure 17-3. Panel D is appropriate when used to represent
A) the quantity of labor demanded by an input price taker. B) the quantity of labor supplied by someone working a fixed number of hours. C) the labor supply curve facing an input price taker. D) the highly-skilled labor market supply curve.
If the government pays a per-unit subsidy to the producer of a service, we would expect to see a(n) I. increase in the quantity demanded. II. decrease in the out-of-pocket price paid by consumers. III
increase in the quantity supplied by producers. A) I only B) both I and II only C) both II and III only D) I, II, and III
Which of the following is a property of a forward contract?
a. In a forward contract cash is traded for immediate delivery. b. The buyer of a forward contract is "short" while the seller of the contract is "long". c. In a forward contract, the seller must own the commodity which is being traded. d. The value of future delivery depends on the market price of the commodity.