Principles of Microeconomics Fall 2017 Online Quiz: Firms in Perfectly Competiti

Question

Principles of Microeconomics Fall 2017 Online Quiz: Firms in Perfectly Competitive Markets Quiz This Question: 1 pt 7o 7 (2 complete) Y What is meant by allocative efficiency? Allocative efficiency is when every good or service O A. is produced at lowest possible cost. O B. is produced up to the point where price equals marginal cost. O c. produced generates an equal amount of consumer surplus and producer surplus. D. is produced up to the point where price equals marginal revenue. is produced up to the point whero the difference between the marginal benefit for consumers and the marginal cost of producing it is ma What is meant by productive efficiency? Productive efficiency s A. when labor, machinery, and other inputs are allocated to produce the goods and services that best satisfy consumer wants. O B. when a good or servico is produced at lowest possblo cost. O C. when a good or service is produced such that economic surplus is maximized. O D. when the average cost of production decreases with output OE, when a good or service is produced such that marginal cost is minimized. Briefly discuss the difference between these two concepts O B. ° C. 0 D. E. Productive efficiency results in zero oconomic profits but alocative efficiency does not. Economic surplus is maximized with productive efciency but not necessarily with allocatve efficiency. Perfect competition results in productive eficiency but not necessanly allocative eficiency Perfect competition results in allocative efficiency but not necessarily productive effciency. Productive efficiency pertans to production within an industry while allocative efficiency petans to production across all industries Click to select your answer MacBook Pro 2 3 4

Explanation / Answer

1.is produced up to the point where the marginal benefit for consumers equal the marginal cost of producing it

2.when a good or service is produced at lowest possible cost

3.Productive efficiency: production within an industry
*Allocative efficiency: production across all industries

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