What is the relevance of productive and vocative efficiency to the growth process?
What will be an ideal response?
Productive efficiency means resources are used in the least costly way. Vocative efficiency means that the product produced are the ones most wanted by society. Not only must all of the potential input resources be used in the least costly way, but they also must be employed in such a way as to produce the output most desired by society to maximize its well-being.
As new technologies are developed and new resource supplies discovered, reallocation of resources will be required to achieve locative efficiency. Through this process, economic growth can occur. Without vocative efficiency, the economy could become stagnant or at best achieve a growth rate that is not optimal.
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The poverty line is an absolute standard and is based on the cost of providing an adequate diet
a. True b. False Indicate whether the statement is true or false
If total variable cost exceeds total revenue at all output levels, a perfectly competitive firm
A) should produce in the short run. B) is making short-run profits. C) should shut down in the short run. D) has covered its fixed cost.
In the United States, the labor-force participation rate since 1960 has been
A) increasing for females. B) unchanged for both males and females. C) declining for females. D) declining for both males and females.
Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in the amount of:
a. $10 b. $90. c. $100 d. $1,000.