Teams have an incentive problem called free-riding
Indicate whether the statement is true or false
True
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Allocative efficiency best explains ________, and productive efficiency best explains ________
A) why something will be produced; what will be produced B) what will be produced; how something will be produced C) how something will be produced; when something will be produced D) when something will be produced; why something will be produced
Full employment describes the condition in which
a. 100 percent of the civilian labor force is employed. b. 95 to 96 percent of the civilian labor force is employed. c. there is no frictional unemployment. d. unemployment is 10 percent or less.
Which of the following contributed to the severity of the Great Depression?
a. the substantial budget surpluses run during the Hoover administration b. a sharp increase in tariff rates in 1930 c. the large reduction in tax rates under the Hoover administration d. a highly expansionary monetary policy followed by the Fed in the late 1920s and early 1930s
Even though the efficient use of resources enhances social welfare, it may not always be optimal from society's perspective. Why is this statement true?
a. Efficiency leads to lower per unit costs; thus, promoting any method of cost control increases efficiency. b. The ethical use of resources can be just as important as their efficient use. c. If market action does not result in an efficient outcome, government action can always improve the outcome. d. Efficient outcomes sometimes waste resources. e. Markets always reward efficiency, even if there is only one firm in it.