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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Jimmy's utility of wealth schedule is given in the table above. Jimmy has a job with a one-third chance of earning $200 and a two-thirds chance of earnings $400. Jimmy's cost of risk is
A) $0. B) $16.67. C) $33.33. D) Jimmy's cost of risk cannot be determined without more information.
Referring to a production possibilities curve and the goods being compared, depict the economic event. Computerization in the 1990s launched thousands of new businesses in the United States (capital goods vs. consumer goods).
A. A movement from a point inside the curve to a point on the curve B. A movement from a point on the curve to a point inside the curve C. A shift in the entire curve to the right (outward) D. A shift in the entire curve to the left (inward)