Which of the following statements is true about productive and allocative efficiency?
A. Realizing allocative efficiency implies that productive efficiency has been realized.
B. Productive efficiency can only occur if there is also allocative efficiency.
C. Society can achieve either productive efficiency or allocative efficiency, but not both
simultaneously.
D. Productive efficiency and allocative efficiency can only occur together; neither can occur
without the other.
Answer: A
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If a market begins in equilibrium and then the demand curve shifts leftward, a
A) surplus is created, which is eliminated by a rise in price. B) shortage is created, which is eliminated by a rise in price. C) shortage is created, which is eliminated by a fall in price. D) surplus is created, which is eliminated by the supply curve shifting leftward. E) surplus is created, which is eliminated by a fall in price.
Derive the budget line equation for the case where good 2 is a composite good. What is the vertical intercept and what is the slope?
What will be an ideal response?
______________—a term referring to when a given percent price change in price leads to an equal percentage change in quantity demanded or supplied.
a. Infinite elasticity b. Zero inelasticity c. Constant unitary elasticity d. Perfect elasticity
Monopolistic competition is like perfect competition in that they both experience?
a. downward sloping demand curves b. product differentiation c. easy entry and exit from the market thus eliminating long-run profits d. barriers to production to keep other market participants out in the long run