Allocative efficiency means achieving the optimal or most desired point on the production possibilities curve.
Answer the following statement true (T) or false (F)
True
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________ mergers can lead to increased market power and, as a result, ________ the total surplus in the market.
A) Horizontal; increase B) Vertical; increase C) Vertical; decrease D) Horizontal; decrease
There is no easy way for policymakers to reduce the economy's natural rate of unemployment while at the same time reducing the hardships of the unemployed
a. True b. False Indicate whether the statement is true or false
A government's policy of redistributing income makes the income distribution
a. more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. b. more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient. c. less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. d. less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.
Suppose that Thom experiences a greater loss in utility if he loses $50 than he would gain in utility if he wins $50 . This implies that Thom's
a. marginal utility diminishes as wealth rises, so he must be risk averse. b. marginal utility diminishes as wealth rises, but we can't tell from this if he is risk averse. c. marginal utility increases as wealth rises, so he must be risk averse. d. marginal utility increases as wealth rises, but we can't tell from this if he is risk averse.