Resource Use Is Allocatively Efficient

question 78

Multiple Choice

Resource use is allocatively efficient

• A) whenever marginal cost exceeds marginal benefit.
• B) whenever marginal benefit exceeds marginal cost.
• C) when marginal benefit equals marginal cost.
• D) when the maximum possible quantity is being produced.

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Definitions:

Expected Rate Of Return

The anticipated gain or loss on an investment over a specific period, usually expressed as a percentage.

Portfolio

An assortment of monetary assets such as shares, bonds, goods, money, and money equivalents, along with closed-end funds and exchange-traded funds (ETFs).

Risk Premium

The extra return expected by an investor for holding a risky asset compared to a risk-free asset.

Capital Asset Pricing Model

A model used to determine the theoretical expected return of an investment, considering its risk and the time value of money, compared to a risk-free return.