"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer
What will be an ideal response?
The statement is false. Allocative efficiency requires that production be such that the marginal benefit equals the marginal cost. Allocative efficiency has nothing to do with requiring that the maximum number of people have access to all the goods and services produced.
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Monopolistic competition is a market structure in which
A) a small number of firms compete. B) firms produce identical products. C) firms compete only on product price. D) firms are free to enter and exit the market.
Investment, as defined by economists, would not include which of the following? Ford
A) adds 1,000 new cars to inventories. B) builds another assembly plant in the United States. C) buys a new robotic machine (from a plant in Ohio) to assemble cars. D) buys U.S. government bonds.