Which of the following statements is correct?
A) Mrs. Lovejoy decides to invest in companies which she believes are producing their goods based on the preferences of consumers. Mrs. Lovejoy is therefore investing in companies that are allocatively efficient.
B) Mrs. Lovejoy decides to invest in companies which she believes are producing their goods based on the preferences of consumers. Mrs. Lovejoy is therefore investing in companies that are productively efficient.
C) Mrs. Lovejoy decides to invest in companies which she believes can produce their goods at the lowest possible cost. Mrs. Lovejoy is therefore investing in companies that are allocatively efficient.
D) Mrs. Lovejoy decides to invest in companies which she believes can produce their goods at the lowest possible cost. Mrs. Lovejoy is therefore investing in companies that are both allocatively and productively efficient.
Answer: A
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Suppose the consumer price index (CPI) for Year X is 130. This means the average price of goods and services is:
A. currently $130. B. 130 percent more in Year X than in the base year. C. 130 percent more in the base year than in Year X. D. priced at 30 percent more in Year X than in the base year.
The actual dollar value of the costs would have to be ________ the actual dollar value of the benefits for an investment in early childhood education to be justified in present value terms.
A. much less than B. much greater than C. discounted more heavily than D. at least equal to