Allocative efficiency occurs
A) anywhere inside or on the production possibilities frontier.
B) when the total cost of production is minimized.
C) at all points on the production possibilities frontier.
D) at only one point on the production possibilities frontier.
E) at the points where the production possibilities frontier crosses the horizontal or vertical axis.
D
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When banks borrow money from the Federal Reserve, these funds are called
A) federal funds. B) discount loans. C) federal loans. D) Treasury funds.
Saving is often discouraged by usury laws during inflationary periods because
A. nominal rates of interest are kept above real rates of interest. B. nominal rates of interest are kept below inflation rates. C. nominal rates of interest are kept above inflation rates. D. real rates of interest are kept above inflation rates.
Suppose for a regulated monopoly that price equals minimum ATC but price exceeds MC. This means that:
A. both productive and allocative efficiency are being achieved. B. productive efficiency is being achieved, but not allocative efficiency. C. allocative efficiency is being achieved, but not productive efficiency. D. neither productive nor allocative efficiency is being achieved.
Inflation is a:
A. movement of the economy toward full employment. B. sustained rise in the general level of prices. C. one-time change in the general level of prices. D. sustained decline in the general level of prices.