Which of the Following Is Necessary for Allocative Efficiency to Be

question 34

Multiple Choice

Which of the following is necessary for allocative efficiency to be achieved?

• A) The difference between marginal benefit and marginal cost must be maximised.
• B) Production must be at a point inside the production possibilities frontier.
• C) Marginal benefit must be maximised.
• D) Marginal benefit must equal marginal cost.
• E) Marginal cost must be minimised.

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Definitions:

Three-For-One Split

A stock split in which each shareholder receives three new shares for each share they currently own.

Stock Price

The stock price is the cost of a single share of a company's stock, reflecting the market's value and investors' perceptions of the company's future prospects.

Shares Outstanding

Shares outstanding refer to the total number of shares of a company’s stock that are currently owned by all its shareholders, including shares held by institutional investors and restricted shares owned by the company’s officers and insiders.

Expectations Theory

A hypothesis in finance that the long-term interest rates reflect expected future short-term rates, adjusting for risk premium.