What is allocative efficiency?
A) It refers to a situation in which resources are allocated to their highest profit use.
B) It refers to a situation in which resources are allocated such that goods can be produced at their lowest possible average cost.
C) It refers to a situation in which resources are allocated such that the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it.
D) It refers to a situation in which resources are allocated fairly to all consumers in a society.
Answer: C
You might also like to view...
Consider two economies: A and B. Economy A is located close to the equator and is characterized by an extreme climate. The terrain in economy A is inhospitable and it lacks rivers or other water bodies in its territory
On the other hand, economy B is located in the temperate zone with a pleasant climate, fertile soil, and navigable rivers. Suppose the geography hypothesis of economic growth holds. a) Which of the two economies is likely to be more prosperous? b) Is the difference in prosperity between the two economies likely to be sustained in the long run?
Excise taxes are a form of sales tax
a. True b. False Indicate whether the statement is true or false