What is meant by productive efficiency? How does a perfectly competitive firm achieve productive efficiency?
What will be an ideal response?
Productive efficiency refers to the situation in which a good or service is produced at the lowest possible cost, in particular, every good or service is produced up to the point where the last unit is produced where the market price is equal to minimum average total cost.
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In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. The deadweight loss is borne by
A) the producers only. B) the consumers only. C) all producers and some consumers. D) all consumers and some producers.
Refer to Scenario 1-1. Using marginal analysis terminology, what is another economic term for the incremental cost of producing the last 400 t-shirts?
A) operating cost B) marginal cost C) explicit cost D) Any of the above terms are correct.
A proponent of supply-side economics would advocate
A. increasing income taxes on saving. B. reducing corporate income tax. C. increasing capital gains tax. D. increasing personal income tax.
A direct cost of public debt is:
A. the interest the government has to pay to the people it has borrowed from. B. it allows the government to be flexible when something unexpected happens. C. it can pay for investments that will lead to economic growth in the long run. D. All of these are costs to holding public debt.