Answer the following statement true (T) or false (F)
1) Allocative efficiency occurs where (for the last unit) maximum willingness to pay exceeds
minimum acceptable price by the greatest amount.
2) Allocative efficiency occurs where the collective sum of consumer and producer surplus is at a
maximum.
3) That government that has the smallest budget is the most efficient in the economic sense.
4) A demand curve for a public good is determined by summing horizontally the individual
demand curves for the public good.
5) The optimal quantity of a public good occurs where the marginal benefit of the citizen who has
the highest preference for the good just equals the good's marginal cost.
1) F
2) T
3) F
4) F
5) F
You might also like to view...
Which of the following was NOT a cause or a characteristic of the 1994/95 Mexican peso crisis?
A) An overvalued exchange rate B) An inflow of large foreign portfolio capital C) The inability of the IMF, the world bank, and the NAFTA member countries (i.e., the United States and Canada) to predict the looming financial crisis D) Shifts by the world capital markets toward more conservative and risk-averse investments because of interest and exchange rate movements around the world
Screening is
a. actions by the informed party to reveal her true risks b. actions by the informed party to conceal her true risks c. actions by the uninformed party to uncover the true risks d. actions by the uninformed party to conceal the true risks