Resource Use Is Allocatively Efficient If the

question 448

Multiple Choice

Resource use is allocatively efficient if the

• A) marginal cost of what the resource produces is equal to the marginal benefit of what is produced.
• B) total cost of what the resource produces is less than the total benefit of what is produced.
• C) total cost of what the resource produces is equal to the total benefit of what is produced.
• D) marginal benefit of what the resource produces has diminished to zero.

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Definitions:

Penny Stocks

Refers to shares of small companies traded at very low prices, often considered highly speculative.

Underpricing

The practice of setting the initial stock price below its intrinsic value during an initial public offering (IPO).

Dilution Effects

In finance, the decrease in existing shareholders' ownership percentage of a company as a result of the company issuing more shares.

Aftermarket

A market for trading shares of a company after the initial public offering (IPO), also known as the secondary market.