Allocative Efficiency Is a Property of the Behaviour of

question 65

Multiple Choice

Allocative efficiency is a property of the behaviour of

• A)individual firms.
• B)all firms in an industry.
• C)perfectly-competitive firms.
• D)monopolies.
• E)the overall economy.

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Definitions:

Owner's Equity

Owner's equity represents the owner's stakes or claims against the assets of a business, equal to the total assets minus total liabilities.

Liabilities

Financial obligations or debts that a business or individual owes to others, which are expected to be settled over time through the transfer of economic benefits like cash or goods.

Assets

Resources owned or controlled by a business that are expected to benefit future operations.

Accounting Equation

The foundational equation in accounting, Assets = Liabilities + Owner's Equity, showing the relationship between a company's assets, liabilities, and equity.